Alan Pink looks at tax problems with making partial realisations of value from family property companies, and how to mitigate those problems.
The family property holding company has always been a popular business structure, and for various reasons (including the ‘Section 24’ iinterest disallowance) seems likely to become ever more popular - whether deservedly or not.
Unlike the situation where property is simply held direct by individuals, property investment companies can give rise to much head scratching when it comes to a particular need to realise funds from out of that company, as the following examples will illustrate.
What’s the problem?
Put in crude terms, once you hold a property portfolio through a limited company, it isn’t ‘yours’ in the same sense as if you owned the property