2 Houses,Better to sell through Biz or Personally -Tax?

[mattf93]

Hi Valued PHers,

I am looking for some advice on my dads current biz predicament, as he's not exactly proactive in finding information - being the good son I am, I'm trying to find out if we have missed anything.

Long story short Bought a property with land, demolished garage and built a big stone build 3 bedder (4 if you count the large study)
and renovated the existing cottage and extended to include a further bedroom and large lounge.

The issue we are facing is in the sale of the properties - he has been advised by his accountant (not a property specialist) to sell through the business (deed currently registered in the business name) - but he seems to think he just gets charged corp tax at circa 20% but is planning on taking all property profits out the business in presumably one big dividend. I then believe you get charged a further 28% on that profit on top of the corp tax?

Has anyone achieved any better way? Selling personally I believe is a straight 40% tax.

I would really appreciate any valued responses.

Thanks,

Matt

[BassFlyer]

Who owns the land?
If that is limited company it will likely be 20% Corp tax on the profit plus personal tax to extract remainder from company. That could be dividend/salary/pension or capital taxes if on winding up.
If personal then will be marginal rates possibly plus NIC. May be able to argue for capital treatment but that depends on intentions when it was bought. If he lived there that could have a big impact on tax rates.
Ultimately he needs to get clear advice based on all the facts.

[Eric Mc]

Not enough information in the OP's post to be able to give any meaningful advice.

[Europa1]

If it is registered in the name of his business at the moment, how would you propose he sell it personally?

[Eric Mc]

And how were tax and Stamp Duty matters handled at the time the property was put into the name of the business?

[KevinCamaroSS]

In simple terms:

If the limited company owns the property he cannot sell it personally, he would have to sell it to himself first (at market value) and then sell it himself resulting in a tax double whammy.

If he owns the property personally he cannot sell it through the business unless he sells it to the business first, again ending in a double whammy.

If the 'business' is him operating as a sole trader then it is always personal anyway, no legal difference between the business and him personally.