Residential Property Investment Proposal
Taxation
The Companies will not qualify for EIS relief, nor will Investors
be able to hold their shares in an ISA. However, it is possible
that the Companies may be accepted by the Inland Revenue as
trading companies rather than investment companies, in which
case Investors should qualify for 'business asset' taper relief
from capital gains tax, meaning they may pay 10% Capital Gains
Tax having held the shares for four years or more (expected
to reduce to two years after the 2002 Budget). The Companies
precise tax status will be agreed with the Inland Revenue
from year to year.
It is anticipated that the Companies will pay Corporation
Tax at a marginal rate between the small company rate of 20%
and the full rate of 30% on both revenue profits and realised
capital gains. For the purpose of the financial illustrations
herein, an average marginal rate of 25% has been adopted.
This is of course dependent on existing rates of taxation
continuing to apply.
If you are considering investing in the Companies you should
consult your own independent financial and tax advisors, before
subscribing for shares.
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