Sorry, post should have read I do not currently get involved in the accounts prep, but my role is changing going forward. I have prepared accounts in the past but not for many years.
Thank you - Edited!
Thank you all, if they sold with just planning, the purchaser would only buy with the intention of converting to residential anyway so the buyer could ask for the option to be disapplied, however I assume this makes the supply exempt thus affecting VAT already reclaimed?
Planning would cost circa £200k but VAT on future sale (with planning only - no work carried out) would possibly be £800k (using £4m as approx. sale price) meaning the buyer would pay extra £40k of stamp (@ 5%) which is the same as the VAT reclaim.
Thanks all for comments, yes, I simplified my question in terms of the values, I appreciate that discounts would be applicable but I didn't want to confuse things as my Q was mainly around the base cost to use which you have all kindly answered, so thank you.
Thank you, what additional information do you require? Company A is an investment company with no trading activities, Company B is a hold co of a trading group.
Thanks John, I get it now, the key point being:
The investor company making the disposal must be a trading company or a member of a trading group.
Member, rather than holding company.
any thoughts regarding the issues I have around qualifying for ER?
Yes, that's correct.
Am I right I’m saying CGT will not apply to distribution because she is connected to the company post transaction? I was hoping ER would be available on payment of £500k
thank you, how about ones where the structure was already in place prior to 2013? i.e can the Limited company still be taxed on the profits now even though the rules have changed?
Hoping that the profits of the LLP will now be subject to corporation tax rather than income tax?