An individual is about to sell some land which was used by their family company in which they own 50% of the shares and they intends to roll-over the gain into replacement assets. The family shareholders also want to wind up the company and continue to trade through a family LLP. The company’s own buildings and goodwill are valued at less than £100,000, but is the value of the land also taken into account when deciding if dis-incorporation relief is available?
No, you only need to consider the value of the assets owned by the company. But have you considered the roll-over relief implications? Gains arising on the disposal of personally owned assets used in the trade of his family company may only be rolled over into the cost of replacement assets to be used by the same company. So if the company is wound up before replacement assets are acquired then there will be no entitlement to roll-over relief.