Will entrepreneurs’ relief be due on shares in a company that lets a holiday flat?
Our client company has been trading since 2008 as an interim management and placement consultancy. It has been quite profitable and in recent years rather than draw excess profits as dividends the husband and wife directors have withdrawn funds as short-term loans at the official rate.
These loans have been repaid recently and the company has purchased a large commercial property.
The intention is that this will be used in part as their office/meeting room (they do not employ more than one or two people as much of their work is done through subcontractors) and partly as a recruitment cafe enabling users to obtain advice register for possible placement and use internet facilities.
The upper floor is being refurbished to create a serviced two-bedroom apartment with a view to letting it principally as a short-term furnished holiday let.
Our question concerns capital gains tax...
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