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bigduckontax
bigduckontax, Accountant
Category: Tax
Satisfied Customers: 3936
Experience:  FCCA FCMA CGMA ACIS
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My golf club is a company limited by guarantee and has 25 years

Customer Question

My golf club is a company limited by guarantee and has 25 years left on a lease to use the land as a golf course. The freeholder has offered £25m to buy back the lease. As the land is a wasting asset and the value now is much less than on 31.3.82 there will be no CGT liability. My question is would the £25m be used as part of the normal corporation tax computation?
A colleague has told me that I may have to give you a direct debit before you answer my question but I do not understand why as I thought this was a free service.
Submitted: 1 year ago.
Category: Tax
Expert:  bigduckontax replied 1 year ago.
Hello, I am Keith, one of the experts on Just Answer, and pleased o be able to help you with your question. Just Answer is an independent tax advice service and not connected in any way with HMRC. Your golf club is a limited company. Limited companies are not subject to CGT, any capital gains or losses are merely passed through the trading account of the company, inflating or deflating the profits in consequence. Thus if the company opts to allow the lease to be bought back the 25m received will be taken into account in the Corporation Tax (CT) computation for the relevant year. I do hope that my reply has cleared the air in this matter.
Expert:  dianne-cssm replied 1 year ago.
We received your customer service inquiry, however, we are unable to respond to you because we do not have your email address. Please contact customer support at***@******.*** and provide us with your email address and a link to this question page so that we can help you.
http://www.justanswer.co.uk/tax/9e403-golf-club-company-limited-guarantee-25-years.html
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