On the previous question was the 2 year period normal or can it vary?
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.
I wish I had known you when I started the company. It seems I paid the taxman a fortune for nothing! Is there a way to redress this? How come Rangers FC and BHS were sold for £1?
At the start of my question I asked this about the VAT: On the previous question I asked was the 2 year period normal or can it vary?
Could my accountant make the application for me or do I need a lawyer?
What I meant was: Can my accountant deal with the HMRC or do I need a lawyer to get back my Capital Gains Tax I unnecessarily paid.
I have just had another thought. Wil this Directors Loan be subject to Inheritance Tax?
The loan figure should not exceed the new Inheritance Tax limit anyway.
Many thanks for your help you have been excellent. I know where to find you in the future.