Transfer of Fixed Assets to Director

I have a dirctor who's Company owns a property and he would like to pay himself the property as a dividend (say the value of £500,00) to make things quantative.

He would like to know whether he will incur CGT or just the payment at the dividend rate of tax - also he woud like to know how this will affect the business in regards to Corp. Tax.

Am I correct in saying (as this is a very practice based question in my mind) that the asset would need to be 'purchased' at market value and therefore the value 'paid' (£500,000) would be subject to standard tax from the Companies perspective AND his personal tax computations would then reflect a liability of CGT based on the fact no money has actually exchanged hands and he was 'paying' himself this asset as a dividend.

Your help and assistance with a reasonable explanation would be greatly appreciated as I have come a bit unstuck with my reasoning for the treatment of the implication either way.

 

Thanks guys,

 

Ant

Comments
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Dividend in-specie

Steve Kesby |
Steve Kesby's picture

Thanks

Anthony.Evans82 |
Anthony.Evans82's picture

.

blok |
blok's picture

Also....

Anthony.Evans82 |
Anthony.Evans82's picture

You're right on the company side.

Steve Kesby |
Steve Kesby's picture

No! Read what Steve said

Chris Smail |
Chris Smail's picture

Chris / Steve

Steve Holloway |
Steve Holloway's picture

Sorry, clarification

Steve Kesby |
Steve Kesby's picture

Thanks ...

Steve Holloway |
Steve Holloway's picture

Yes, thats what I meant

Chris Smail |
Chris Smail's picture

Thought it was automatically a "distribution"

Paul Scholes |
Paul Scholes's picture

Paul

Steve Kesby |
Steve Kesby's picture

Simpler way?

forgeron |

Thanks Steve

Paul Scholes |
Paul Scholes's picture

Simpler Way? - possibly not!

brian.barrett |