Selling commercial property tax

[davidc1]

I have question please around a flat and a shop i hold with my siblings within a ltd company.
Looking to sell. Too much agg owning it jointly!
Directors loans are 480 . Property is worth 900.
Tax to pay is corporation at 19 pc or 25 pc on the difference?
Is that all the tax we will pay?
Thanks for any help.

[Mogul]

Loan not relevant, it would be your purchase cost value (+ improvements?) that will determine what the chargeable gain is, and that will be taxed at 19-25%…

[bennno]

davidc1 said:

I have question please around a flat and a shop i hold with my siblings within a ltd company.
Looking to sell. Too much agg owning it jointly!
Directors loans are 480 . Property is worth 900.
Tax to pay is corporation at 19 pc or 25 pc on the difference?
Is that all the tax we will pay?
Thanks for any help.

How do you end up owning a 900k commercial property without a basic grasp of capital gains tax?

The borrowing against the property is irrelevant.

You pay CGT on the sale price less sale costs (solicitors, estate agents fees), less the purchase price, less any eligible improvements, less any purchase costs (e.g. solicitors, stamp duty)

24% tax if higher rate, but various reliefs potentially available - you'd want an accountant to advise.

[PoorCarCollector]

bennno said:

davidc1 said:

I have question please around a flat and a shop i hold with my siblings within a ltd company.
Looking to sell. Too much agg owning it jointly!
Directors loans are 480 . Property is worth 900.
Tax to pay is corporation at 19 pc or 25 pc on the difference?
Is that all the tax we will pay?
Thanks for any help.

How do you end up owning a 900k commercial property without a basic grasp of capital gains tax?

The borrowing against the property is irrelevant.

You pay CGT on the sale price less sale costs (solicitors, estate agents fees), less the purchase price, less any eligible improvements, less any purchase costs (e.g. solicitors, stamp duty)

24% tax if higher rate, but various reliefs potentially available - you'd want an accountant to advise.

I think that's pretty unfair... easy to have no idea on CGT if you've never sold a property where CGT would apply. The OP mentions its owned with their siblings, so most likely an inherited family property.

Also you seem to have totally missed the part where the OP mentions its held in a Ltd company..... so it'll be CT due 1st and CGT wouldn't apply until any qualifying personal gains made by directors. You are quite correct though that the company accountant should be able to advise on all inc the most tax efficient way of extraction of the remaining funds in the ltd company, once the property is sold.

Edited by PoorCarCollector on Saturday 20th December 18:18

Edited by PoorCarCollector on Saturday 20th December 18:19

[davidc1]

Thanks for the replies.
It was indeed an inheritance. And I've not sold anything like this before. Its just awkward owning this property multiple ways. Different needs/aims/etc and we all want to do our iht planning .
I will speak to my accountant as suggested.
I was just seeking clarification on corporation tax and if this would be the only tax to be paid on the sale V the inherited value?

[PoorCarCollector]

davidc1 said:

Thanks for the replies.
It was indeed an inheritance. And I've not sold anything like this before. Its just awkward owning this property multiple ways. Different needs/aims/etc and we all want to do our iht planning .
I will speak to my accountant as suggested.
I was just seeking clarification on corporation tax and if this would be the only tax to be paid on the sale V the inherited value?

Yes, on sale of the property, only corporation tax will be due at the end of the year, as you say its owned by a Ltd company.

Personal taxes for the individual directors would only be due once any money is paid out to them from the company. Lots of tax efficient ways to do this over time and could also pay into SIPPs to reduce corporation tax. Any good accountant should cover it all.