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Transferring an asset from a company to its owners

03 December 2019 / Mark McLaughlin
Issue: 4723 / Categories: Comment & Analysis
11822
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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