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taxadvisor.uk
taxadvisor.uk, Chartered Certified Accountant
Category: Tax
Satisfied Customers: 4996
Experience:  FCCA - over 35 years experience as a qualified accountant (UK based Practitioner)
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The freehold of a block of 72 flats is owned by a limited company

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The freehold of a block of 72 flats is owned by a limited company and each of 71 leaseholders own one share in that company.The 72nd flat is the property of the company and, since being built in 1975, has been used by a resident caretaker. However, the current caretaker did not take up the offer of the flat with the job. Now a major maintenance project is required and the Leaseholders are interested in selling the flat to part pay for the work. If sold, would the or a proportion of the money received be subject to any taxation - CGT or Corporation or any other.
Submitted: 3 years ago.
Category: Tax
Expert:  taxadvisor.uk replied 3 years ago.
Hello and welcome to the site. Thank you for your question.

If the owner of Flat 72 is the limited company, any profit from sale of the flat would be taxable in the company's accounts as the company would be showing this property as tangible fixed asset. Although it is capital gain. Corporations don't pay CGT but it is assessed as profit chargeable to corporation tax.

I hope this is helpful
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Customer: replied 3 years ago.

If we sold the flat for £180,000, would all of that be taxable and at what rate please?

Expert:  taxadvisor.uk replied 3 years ago.
Chris, thank you for your prompt reply.

If you sold the flat for £180k.... on the profit you make on sale of it would be chargeable to Corporation tax at 20%

I hope this is helpful.
Expert:  taxadvisor.uk replied 3 years ago.
I thank you for accepting my answer.

Best wishes.
Customer: replied 3 years ago.

Thank you very much - most helpful