Many thanks for your most welcome reply, Norman
Many thanks Keith for your excellent answer and I have another question. what do I do now?
I formed a limited property company in November 2008 with myself and my two sons as directors with each son having 49% ownership and myself 2%. I owned three residential properties and by November 2009 I had transferred them to the new company as a gift and without any payment. I had all the valuations valued from a very reputable chartered surveyors company, and informed the HMRC what I had done. Then from my own personal account, I paid the all the Capital Gains Tax due based exactly on these valuations.
By November this year all the properties will be outside the seven year period and exempt from Inheritance Tax.
These properties were a gift and I wanted to them to appear on the balance sheet as capital, based on their valuation but my accountant has labelled it a directors Loan even although no loan agreement exists. The result is that the loan shows the company as barely solvent. The accountant says he does this because it is a tax advantage but I cannot see this.
In future years should any of these properties be sold what would the tax liabilities be?
Can the properties be quoted on the asset side of the Balance Sheet as “Property” and on the other side of the Balance Sheet as “Capital”?
I would value your advice and any other comments you wish to make.
It relates to the first question and I would be happy for you to answer this one but do go about this?
OK I will do this now