Readers’ forum: Capital gains on transfer of property to new company

Dentist surgery

I have a dentist client operating as a limited company. The surgery where the practice is located is owned by the directors personally. They charge the company a market rent. They now wish to transfer the freehold to a new limited company (owned by the same directors). My question is whether the resultant capital gain can be held over or will it be immediately chargeable?

Query 20 023 – Dentist.

Incorporation relief would not be available.

Incorporation relief (TCGA 1992 s 162) would not be available despite the property being a business asset. The relief requires the incorporation of a business and the property alone is unlikely to constitute a business. However gift relief may be available (s 165). This allows relief for gifts of assets used in a trade profession or vocation carried on by the transferor or by their personal company....