Share this content
2

Commercial Property in a Company

Any issues removing a property from a company which is in the directors name?

Didn't find your answer?

We have a client whose previous accountant has put a commercial property into a limited company which is jointly owned by 2 seperate individuals (not connected). The property deeds still have the 2 directors as the owners of the property and title was never formally transferred to the limited company. The one director now wants to buy the other one out of the property and business. As the property is still owned by them individually, we assume we can reverse the original transactions against the loan accounts to remove the property from the company and the one director would pay the normal capital gains on the transaction, with the company sale being treated seperately under ER. Does anyone see any issues with this especially as the property was never formally transferred to the company in the first place? Any guidance or comments are much appreciated. Thanks

Replies (2)

Please login or register to join the discussion.

By johngroganjga
07th Jul 2020 06:21

It may not be quite so simple if the legal owners were holding the property on trust for the company, which is what the accounting treatment suggests they and the accountant preparing the accounts believed to be the case.

You need to ask the owners, and the previous accountant if you can, why the property was shown on the company’s balance sheet.

Thanks (0)
Ivor Windybottom
By Ivor Windybottom
07th Jul 2020 10:34

Don't forget SDLT

Thanks (0)
Share this content

Related posts