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bigduckontax
bigduckontax, Accountant
Category: UK Tax
Satisfied Customers: 3710
Experience:  FCCA FCMA CGMA ACIS
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I need some advise on the following: (a) I own some freehold

Customer Question

I need some advise on the following :
(a) I own some freehold land in my personal name
(b) I used the money from my Ltd company to fund development costs to get planning permission which came to £90,000
(c)Now I have decided to sell the land with planning permission
(d) The £90,000 is not a company expense but a personal expense of mine..
Questions
(a) What is the best way to treat this £90,000 for the best tax advantage ?
(b) Should the £90,000 be put to the directors loan account ?
(c) Can this development cost be set off against the sale of the land when i sell it?
Please advise what the best thing to do is.
Submitted: 2 months ago.
Category: UK Tax
Expert:  bigduckontax replied 2 months ago.

Hello, I am Keith, one of the experts on Just Answer, and pleased to be able to help you with your question.

The 90K can be returned to the company's coffers from the proceeds of the sale with no taxation implications. Any interest charged by the company on this, which constitutes a loan to directors and must, in any event be cleared within 18 months of the end of the company's accounting year to avoid horrendous tax consequences, is liable to Corporation Tax (CT) in the company's hands.

Yes, the development costs from part of and are aggregated into the acquisition costs of the land for calculating the gain made on disposal, if any.

I do hope that you have found my reply of assistance.

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