Property company

20 August 2013

Issue: 4416 / Categories: Forum & Feedback , Business , Capital Gains

The shareholders of a small limited company are a husband and wife. The company owns a property and the tenants would like to purchase the freehold interest

I act on behalf of a small limited company which has two equal shareholders: a husband and wife. The company owns and rents out an industrial unit. The business renting the property has indicated that it would be willing to purchase the property for a figure in the region of £200 000.

Which method of sale would be the most tax efficient? That is should the shareholders sell the property freehold or would it be possible for them to sell the shares to the purchasers and still be eligible for capital gains tax entrepreneurs’ relief?

We look forward to readers’ thoughts.

Query 18 242 – Hallgate

Reply from Quaver

For a capital disposal of shares in a company the qualifying conditions for entrepreneurs’ relief for an individual shareholder in TCGA 1992 s 169I are that throughout the period of one year ending with...

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