Tax to pay when selling a Ltd Company owning mixed use property

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    Tax to pay when selling a Ltd Company owning mixed use property

    I am looking for some advice on selling a BTL investment. I own a small company with a second shareholder that comprises 2 flats and a retail shop, e.g. mixed use. We have decided to sell up but are unsure whether it is best to sell all the shares to a prospective buyer, or we do we sell the property held within the company, and then later withdraw the cash?

    My (unsure) understanding is that if we sell the property and keep the Ltd company then Corporation Tax is due on the gain, then later we pay dividend tax on the withdrawals from the Ltd company? If we sell the shares in the company then we pay Capital Gains Tax on the gain made, or is it only Corporation Tax is applied on the cash we receive?

    The complexity for me and my busienss partner which is the most tax efficient way of selling up? Has anyone knowledge of how to exit in the most tax effective way, or maybe there is an accountant in the forum who can provide paid for advice.

    Many thanks


    #2
    You need to talk to an accountant.
    This is one of the reasons that running a property business as a company can be much more complicated than it looks.

    From a practical point of view, is it likely that you could sell the business as a business anyway?

    What you don't want to end up doing is the company paying corporation tax on the gain and then you paying income or dividend tax when closing the company.
    When I post, I am expressing an opinion - feel free to disagree, I have been wrong before.
    Please don't act on my suggestions without checking with a grown-up (ideally some kind of expert).

    Comment


      #3
      Thanks jpkeates.
      We are open to selling as a business or whichever is the most tax efficient. I thought it would be good to post on here as I am sure there will be some other BTL investors holding some properties inside a Ltd company.

      Agreed that we need an accountant to advise, can anyone recommend an accountant for paid advice?

      Comment


        #4
        I own a 50% share in a limited company that owners several BTL properties. You havnt mentioned how you funded the purchases. Did you put money into the company which is owed back to you? Theres lots to consider. You defo need to speak to a decent accountant. Surely you have some sort of accountant onboard if your running a Ltd company?
        its not a concern for me as I will never sell!

        Comment


          #5
          Originally posted by SouthernDave View Post
          its not a concern for me as I will never sell!
          How do you plan to get your money out or pass it on to someone else?
          When I post, I am expressing an opinion - feel free to disagree, I have been wrong before.
          Please don't act on my suggestions without checking with a grown-up (ideally some kind of expert).

          Comment


            #6
            I’ll be drawing down on dividends for the rest of my life. I plan to stop work at 45 and this will be my income.
            when i die, couldn't care less what happens, but im sure the kids will do well out of it!

            Comment


              #7
              Originally posted by gary7 View Post
              Thanks jpkeates.
              We are open to selling as a business or whichever is the most tax efficient. I thought it would be good to post on here as I am sure there will be some other BTL investors holding some properties inside a Ltd company.

              Agreed that we need an accountant to advise, can anyone recommend an accountant for paid advice?
              You need to discuss with a tax accountant if qualify for paying cgt at 10% rate available to entrepreneurs :

              https://www.gov.uk/tax-sell-shares/relief

              Comment

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