The following Corporation Tax guidance note Produced by Tolley in association with Jackie Barker of Wells Associates provides comprehensive and up to date tax information covering:
This guidance note explains the various aspects which need to be considered in relation to a company’s disposal of premises and the calculation of the chargeable gains position.
The calculation of the tax position for a disposal of land and / or buildings will generally be computed in the same way as any other asset. For a general overview of the capital gains position of a company and the calculations required, please refer to the Calculation of corporate capital gains guidance note.
Where the disposal takes place between connected parties, or the asset is disposed of otherwise than by a bargain at arm’s length, the actual consideration is ignored and the market value of the asset is taken to be the proceeds for tax purposes.
For further guidance on what constitutes a disposal between connected parties and circumstances where the market value of the asset should be substituted for actual consideration, please refer to the Connected party disposals and Assets gifted to employees or shareholder family guidance notes.
Where only part of a company’s holding is disposed of, it is necessary to apportion the allowable cost under the part disposal rules using the following formula:
A = gross disposal proceedsB = market value of the part retained at the date of disposal
A = gross disposal proceeds
B = market value of the part retained at the date of disposal
TCGA 1992, s 42
There are special rules that may apply to the part disposal of land which provide relief against the potential chargeable gains. See the Part disposals guidance note.
The amounts that are allowable as a deduction from the disposal proceeds include the original acquisition cost and any incidental costs of acquisition or disposal.
Further details regarding these costs can be found in the Calculation of corporate capital gains guidance note.
Land and buildings are one of the main assets which may qualify for rollover relief. Where a property has had a gain rolled over against it, the allowable cost on a subsequent disposal should be reduced by the amount of the
**Free trials are only available to individuals based in the UK. We may terminate this trial at any time or decide not to give a trial, for any reason.
Access this article and thousands of others like it free for 7 days with a trial of TolleyGuidance.
Read full article
Already a subscriber? Login
IntroductionConsortium relief enables losses of a consortium company to be transferred to consortium members in proportion to the consortium member’s interest in the consortium company, and vice versa. Consortium relief is a flexible relief which is available in several different scenarios which are
Legislative definition of plant and machineryThe general rule allowing capital allowances on plant and machinery is given at CAA 2001, s 11. There is no statutory definition of the term ‘plant and machinery’ but there is confirmation in the legislation on what constitutes a building or a structure
The vast majority of companies will have loan relationships and so will need to consider how they are taxed under the loan relationship rules. There are also specific provisions dealing with relevant non-lending relationships and other deemed loan relationships. Companies are generally taxable on
Current year relief and carry back lossesCurrent year relief for trading lossesTrading losses can be offset against total profits of the same period. Total profits covers, for example, chargeable gains or non-exempt dividends.The maximum claim for relief is the lower of the available loss or the
To view our latest tax guidance content, sign in to Tolley Guidance or register for a free trial.