Prior to the money laundering regs I suspect the mistake would have been corrected, a bit of cash would have changed hands in a brown envelope, and there would have been no tax consequences.
But if the company sells the land officially? How would you work the base cost for the chargeable gain? Anyone want to hazard a guess what the problems will be and what it might all cost in accountants' fees?
Surely, as it was gained at nil cost, the gain is 100% of the selling price?
tim
Acquired "30 years ago". Hence rebase to 31/3/82 and calculate gain since then.
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Is that now a trivial job processed entirely by the computer? In the past it would have meant a vast amount of phaffing around and carrying forwards of schedules.
How much would you quote them - the selling price is £12K, purchase price arguably something or arguably nothing?
Would there be anything left after CT?
Is that now a trivial job processed entirely by the computer? In the past it would have meant a vast amount of phaffing around and carrying forwards of schedules.
How much would you quote them - the selling price is £12K, purchase price arguably something or arguably nothing?
Would there be anything left after CT?
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Hi Troy.... I'd be tempted to convert back to 1982 values, using HMRC's own index. Submit that to HMRC for pre-approval before finalising CT600.
If HMRC agree, then indexing the gain (which runs to date of disposal for Companies, unlike individuals) will leave you with no gain. Indeed, with costs of disposal, a slight capital loss which can be offset against something, sometime...!
HMRC may not be too fussed about arguing the point, since the sums are not enormous.
However, I've never had to establish a 1982 value for CGT - and others here well may know far more.
You would need to use a land value index, not RPI. I think you will find that even after the recent downturn in the property market, prices are still higher relative to inflation than they were in 1982.
Are you not overestimating how much "a bit of garden" is worth. What are we talking about? A tenth of an acre of non-building land. What's that work -
2K?I know that you want to save a bit of tax but isn't the effort of doing so going to be more than the tax saved?
tim
Who has been using the land for the last 30 years? if the householder has been using it and nobody noticed that the LR plan was wrong then surely that puts a different complexion on it
Robert
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