Hi I have a Ltd company and i'm in the process of thinking about selling the assets to CIC, the Ltd company has property and the CIC would purchase the property. Can anyone please let me know what the possible pitfalls of this maybe?
Hedi, thanks for the reply I think the CIC could get the investment/loan to purchase the properties. The properties could then be used for social housing. In terms of personal income and assets we would need to look into this.
You also have the option of leasing the property to the CIC, which would keep the property out of the Asset Lock.
Are you planning on selling the property to the CIC for less than market value? There is plenty of finance available for loans secured against property, generally the underwriting is as it is for normal Ltd companies.
Biggest potential pitfalls are usually related to the specific context/idea that you have for the CIC. Why are you considering transferring the assets to a CIC?
In addition to what Heidi has said about capital gains on the asset ,if you do have a CIC and it is a schedule 3 Limited by Share CIC, and you do make profits it is possible to pay a dividend to yourself or investors.