Rollover Relief and the sale of mortgaged land

Rollover Relief and the sale of mortgaged land

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A Limited Company made a large Capital Gain and looked to roll this over against the cost of land which it purchased from a Director.

The land in question was subject to a mortgage in the name of the Director.

For obvious reasons, the lender was not keen on the mortgage being transferred into the name of the Company and wanted to retain a charge on the Director.

As a result, a Deed of Trust was drawn up between the Company and the Director stating that he would be holding the land as nominee for the Company.

This satisfied the Mortgage Company but does would the Revenue be able to challenge the Rollover claim?

SP

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By AnonymousUser
21st Feb 2006 09:16

The legalities seem a little messy.....
I cannot see that a roll-over claim is invalid (assuming all other conditions have been met) if the legal eagles involved are satisfied that beneficial ownership of the land has been transferred to the company. It must surely follow that the buyer has thereby taken on the existing mortgage and the latter is deemed part of the price paid. One hopes that the latter point has not been overlooked and that the company has not perhaps inadvertently paid more than open market
value--- this would lead to other complications.
It is surprising that the bank would not settle for a personal guarantee from the vendor and cut out the nominee performance: did nobody suggest this? Anyway, what is meant by "a charge on the director"?

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