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Please advise if the property is registered in the company's name and shown as a fixed asset.
It is registered in my name in France but was transferred into the company and is shown as a fixed asset on the balance sheet - current depreciated value £72806
Martin, thank you for your reply.
As it is a company asset, any gain from sale of it would attract capital gains tax at corporation tax rate of 20%.
If you have not claimed any capital allowance on this asset, depreciation is normally disallowed, the gain for tax purposes will be the difference between the cost/valuation price at the time of introduction and the eventual sale price.
The company would be able to claim credit for foreign tax suffered if any.
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Thanks. So for final clarity I would be liable for the difference between sale price converted into sterling at the prevailing rate and the book value of 72806. In round terms a gain of £39k or so and a tax liability of 20% on that?
Martin, thank you for your reply..
Your tax liability at CT rate of 20% will be on tax accounts gain and not financial accounts gain. You would take tax written down value as your cost base and selling price converted into Pounds Sterling at prevailing rate. As I mentioned earlier, depreciation would have been added back for tax accounts purposes and you would have capital allowance to replace the depreciation. Please ensure your written down values are the same.
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