A member has sent us this query. Can anyone help, please?
It concerns a UK registered SME with two employees (both of whom are directors/shareholders of the company), which reports under UK GAAP.
" The company is going to be dissolved as the directors have decided to go their separate ways. The company owns a partially developed commercial property worth £100,000 which one director wishes to buy from the company. As the director in question is due a capital distribution of around £150,000 when the company is liquidated is it acceptable for the property to be "sold" to him without any cash being paid to the company (i.e. he is set up as a debtor) then when the company is liquidated this debt is offset against part of the distribution he is due? We're trying to avoid the director having to liquidate his personal assets (ISAs, etc) to buy the property only to have most of the cash returned to him as a capital distribution which he can't then put back into ISAs. "
Bill Haskins, CIMA