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Having a takeout
Key points
- A practical example illustrates the extraction of assets from a limited company.
- The ‘double charge’ on asset extraction is on the same asset rather than the same person.
- The transfer could be treated as employment income and taxed as a benefit-in-kind.
- The benefit must be reported on a form P11D and class 1A National Insurance contributions will arise.
- A capital allowances adjustment may be required.
- A ‘dividend in specie’ is a distribution and a disposal by the company.
Earlier this year a readers’ forum query ‘Company residential property transfer to daughters’ (Taxation 28 February 2019 page 22) questioned the tax implications of the transfer of residential properties from a company to two daughters of the company’s sole director and shareholder.
It is relatively common for assets to be transferred from a company on its winding up and broadly this was...
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