Commercial property swap

[matjk]

Here’s a scenario
One business in a building worth £500k
Another business in 2 joined building worth 250k each

Business 1 wants to swap with business 2 , seems simple , but business 1 paid £180k for building , is there anyway (legal) to avoid paying Corp Tax on the difference,
The net gain to both business is nothing , but if bus 1 has to pay the tax then financially they can’t afford it

Cheers

[MustangGT]

Are all the buildings owned?

If so, is there some sort of commercial stamp duty?

Why not retain ownership and lease to each other at the same rent?

[matjk]

Yes both owned , but as work is needed on both to suit the owners renting to each other won’t really work ,
I guess it’s something we could discus ,

[Rufus Stone]

Assuming the businesses are not connected. I think it will be treated as two sales and two purchases. SDLT will be liable on the purchases and profit realisation for accounts and corporation tax calculation for the two sales.

There may be a scheme to roll the sale profit into the new property as its being immediately reinvested so as not to create a tax liability. Just something in the back of my mind. Check with your accountant.

Edited by Rufus Stone on Saturday 2nd November 08:13

[bigtime]

Can't you both sell to each other for a reduced price?