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Can a charge be avoided on a transfer of land from stock to fixed assets?
Our limited company client is a property developer and is carrying in stock a piece of land that was left over from a previous development on which it was considered that planning permission would never be obtainable.
However following the government’s decision to temporarily relax the planning laws our client has obtained planning consent for five dwellings on the land.
This of course has considerably increased the market value of the land. The client now wishes to build the five units but intends to retain them within the company as investments that it will rent out.
As far as we can see the above action will represent an appropriation of the land from stock to fixed asset investments and CTA 2009 s 157 will deem there to have been a disposal of the land at market value thereby creating a tax liability.
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