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09 August 2021
Tax treatment of a property company distribution.
My client has a property company that owns four ex-local authority buy to let flats in London. He also owns another ten properties personally.
He is thinking of winding up the company selling two of the properties and transferring the other two into his own name by way of dividend. He would then have 12 properties in his own name that he will continue to rent.
After distributing the cash to himself he would have two properties with a value of about £900 000 and £650 000 in cash. Therefore he will have had a distribution of £1 550 000.
I have the following questions:
- If he uses a members’ voluntary liquidation how would this distribution of £1 550 000 be taxed?
- If the company sells all four flats and then buys flats as holiday lets will it have changed its trade and the distribution...
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