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My client acquired the single £1 share of PropCo for £100 000 in January 2017. At the time of the acquisition PropCo’s balance sheet showed an investment property of £180 000 against a bank loan of the same amount. The company had no other assets or liabilities and the rental income was mostly met by expenses. The market value of the property at the time of acquisition was £280 000.
The client has now received an offer to sell the property for £280 000 which he intends to accept.
On the company’s end the bank loan would be repaid a capital gains tax liability would arise on the difference between cost to proceeds (being £100 000) and some £81 000 would be available for distribution. Once distributed the company is understood to have no value.
Are there any grounds for a negligible value claim be made...
Please reach out to customer services at +44 (0) 330 161 1234 or 'customer.services@lexisnexis.co.uk' for further assistance.
