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bigduckontax
bigduckontax, Accountant
Category: Tax
Satisfied Customers: 4198
Experience:  FCCA FCMA CGMA ACIS
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Owned commercial shop since 1999 still have loan on it £190k

Customer Question

owned commercial shop since 1999 still have loan on it £190k just renewed the Lease
in a Limited Company with no other property or investments, for 15 years
@ £42K My Husband is 77 in Oct.16 I am 74 live in rented accommodation
want to buy a small house have been offered £640K for the property.
How can we minimise the Tax position. We do not take any income from it only
pay Corporation tax of between 2 and 3K.PLEASE
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 to be able to help you with your question.

As far as taxation is concerned the loan is irrelevant save that any interest payable thereon is allowable against the trading income for Corporation Tax (CT) purposes.

Assuming that it is the company which holds the shop then Capital Gains Tax (CGT) does not apply as companies are not subject to the CGT regime. Any gain made on the sale ie 640K less the original capital cost of the shop less any improvements forms part of the trading income of the company and will be liable to CT at 20% on disposal.

I do hope that you have found my reply of assistance.