Readers’ forum: Tax effect of land transfer as dividend in specie

My client owns 100% of the shares in a successful trading company. The company owns a piece of land which my client is now looking to take into his personal ownership. The land has a value in the order of £500m.

A transfer of an asset to a director would normally create a benefit-in-kind (BIK) charge and an associated National Insurance contribution (NIC) cost. But what is the position if the land is transferred by way of dividend in specie (DIS)?

We know that the company has the reserves to enable this. Would this take priority over the BIK charge and also not trigger an NIC liability? Is this up to the taxpayer company to ensure that the transfer is documented in the proper way or can HMRC decide which head of charge is to be used?

I think that the CGT charge in the company would be...