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Think carefully about property deals

Shropshire property owners looking to free up cash from their assets are being urged to carefully consider the tax implications.

Tony Elliott our Senior Tax Planner said: “The taxation of land transactions can be extremely complicated.  Whether you own land and buildings personally, in a company, or in another entity such as a charity or a sports club, you will naturally have concerns about the tax implications if you dispose of it.   And there is normally something which can be done to reduce the amount of tax which is payable.

“For example, if you are a company, you can often reduce a tax bill considerably if the property has been owned for a long time.

“There may be capital losses which can be set against any financial gain from the sale, and if it is a business premises and you intend to buy another, you may qualify for what’s known as ‘rollover relief’.”

Tony said sports clubs looking to dispose of properties could benefit by being registered as having Community Amateur Sports Club status.

“This means you will benefit from the same tax relief available to a charity, including exemption from tax on capital gains – provided the proceeds are spent on sports club activities.

“And if you are an individual making a sale, it may be worth considering transferring a share of the property to other family members, to use up their annual tax exemption.”

Tony said: “Most importantly of all, take professional advice before launching into a sale. Every transaction will have its own different set of unique circumstances.” 

Tony Elliott, Senior Tax Planner

The Author

Tony Elliott

Tax Director

Tony joined Dyke Yaxley in 2013 as Senior Tax Planner, providing technical expertise on a wide range of taxation matters…