Readers' forum: Retirement fund

30 October 2018

Issue: 4670 / Categories: Forum & Feedback

Separating business and properties into two companies.

Our clients a husband and wife jointly own a limited company that operates as a pharmacy and has investments in buy-to-let properties. Both the pharmacy and the properties were acquired long ago and have accumulated significant unrealised capital gains.

Our clients wish to retire and sell their business but still retain the properties through a corporate structure for retirement income. Ideally they would like to demerge their existing company into two separate companies owned by them individually – one the pharmacy business the other the properties. They would then sell the shares of the company owning the pharmacy business and pay only 10% capital gains tax under the entrepreneurs’ relief rules and continue to own the properties through a limited company.

I would like to know from readers whether this can be achieved. If so what are the capital gains tax and stamp duty consequences?

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