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2nd October 2013
Posted in Articles, Business Tax, Featured Articles, Property Tax by Andrew Marr
We have been involved in quite a lot of work in tax efficiently splitting interests in investment companies.
A typical scenario is an investment company where shareholders fall out and want to go their separate ways. Although there are various statutory tax reliefs for break-up situations these tend to only apply to trading companies. There are however equally effective ways of structuring things using capital reductions:
Example
The clever bit is that this kind of structuring leads to a tax free uplift in tax base cost for the £400,000 property. Therefore if this had a £100,000 base cost (say) the £300,000 gain would simply disappear. This is probably an unintended effect which may be changed in the future but we are very happy with the current technical analysis.
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