Private & Confidential — Philip Harrison

Keep Funds from the Lanzarote Sale
or Buy Another Property?

A tax-aware scenario comparison for Philip Anthony Harrison and Los Romeros Limited — based on verified €315,000 sale proceeds

Sale Price€315,000
Est. Net to Philip∼£163k–£171k
Sale Date20 March 2026
Report Date31 March 2026
★ Adviser Verdict

Keep the Cash — Do Not Buy Another Property Inside the Company

Buying a new property inside Los Romeros Limited would compound every existing risk: more taxes, more compliance costs, zero CGT reduction, and no escape without an MVL anyway. Complete the MVL, receive the funds personally, then invest freely with clean capital.

Side-by-Side

Scenario A vs. Scenario B — At a Glance

✓ Scenario A — Recommended
Complete MVL — Keep the Cash
Net to Philip personally∼£163k–£171k
Tax rate on extraction18–24% CGT
Ongoing complianceNone — company dissolved
LiquidityFully liquid
Future flexibilityMaximum — use freely
CGT offset from new propertyNot applicable
IHT planning optionsFull — personal funds
✗ Scenario B — Not Recommended
Buy Another Property Inside the Company
Net to Philip personallyNothing — funds stay locked
Tax on eventual extraction18–24% CGT (same rate)
Annual compliance costs£3,000–£8,000 pa
LiquidityIlliquid — capital tied up
Future flexibilityMinimal — another MVL later
CGT offset from new propertyNo — relief does not apply
IHT planning optionsLimited — corporate wrapper
Critical Myth

Will Buying Another Property Offset the Tax?

🚨 No — This Is a Common and Costly Misconception
Buying a new property does NOT reduce, defer, or offset the Capital Gains Tax (CGT) on the Lanzarote sale. The UK has no rollover relief for a passive property-holding SPV like Los Romeros. The CGT crystallised at the moment of sale on 20 March 2026. It cannot be undone.

Why Rollover Relief Does NOT Apply

Business Asset Rollover Relief under s.152 TCGA 1992 allows CGT deferral when a trading business reinvests in replacement business assets. Los Romeros was a passive property-holding SPV with no trade, no rental income, and no business activity. It fails every condition of the relief.

Relief TypeApplies?Reason
Business Asset Rollover Relief✗ NoRequires trading activity — Los Romeros is passive SPV
Principal Private Residence Relief✗ NoOnly applies to individuals, not companies
Business Asset Disposal Relief (BADR)✗ NoRequires trading company
SDLT as CGT offset✗ NoSDLT is a purchase cost, not a CGT credit
Scenario B Deep Dive

What Buying Another Property Would Actually Cost

Additional CostAmountNotes
Stamp Duty Land Tax (SDLT)∼£9,000–£20,000Corporate buyer rate + 3% second home surcharge
Solicitor / conveyancing∼£2,500–£4,000Purchase legal costs
Annual CT600 filing∼£1,500–£3,000 paCorporation Tax return every year
ATED (if property >£500k)£4,400 paAnnual Tax on Enveloped Dwellings
Future MVL (still required)£3,000–£8,000Cannot avoid MVL — just deferred
Minimum extra cost vs. keeping cash£16,000–£35,000+Over 5 years, before second-property CGT
⚠ The CGT Bill Does NOT Go Away
Buying another property keeps Philip’s capital locked in, adds tens of thousands in new costs, and still requires an MVL when he eventually wants the money — at which point he has TWO CGT bills: one for Lanzarote, one for the new property.
Scenario A Deep Dive

Keeping the Cash — What Philip Receives

MVL Tax Waterfall — Scenario A
Sale Proceeds€315,000
Spanish IRNR @ 19% of gain(€17,834)
UK Corp Tax top-up (after FTCR)(∼£4,813)
MVL professional fees (IP + CTA)(∼£7,500)
Director’s Loan returned tax-free+£25,069
Gross MVL distribution∼£218,000
Personal CGT on distribution(∼£47,000–£55,000)
Tax-year straddling benefit+£6,000
Estimated Clean Cash to Philip∼£163,000–£171,000

What Philip Can Do With Clean Personal Capital

Investment OptionAnnual ReturnTax Treatment
Premium savings / fixed-rate bonds4–5% paUp to £500 PSA tax-free; surplus taxable
Stocks & Shares ISA (£20k pa)Market-linkedFully tax-free growth and income
Buy-to-let property (personally)4–7% gross yieldIncome tax on rent; 24% CGT on future gain
Premium Bonds∼4% prize fund rateFully tax-free — backed by HM Treasury
Gifts to children (PETs)IHT nil after 7 yrsNo immediate tax — exits estate progressively
✓ If Philip Wants Property — Buy It Personally After MVL
Any future property investment is far more tax-efficient as an individual — PPR relief available if it becomes a home, simpler compliance, no ATED, and no corporate CGT layer. The same goal is achieved at far lower cost.
Pros & Cons

Full Pros and Cons

Scenario A — Complete MVL + Keep Cash

Pros

  • Clean exit — no ongoing compliance
  • Lowest tax rate (18–24% CGT)
  • Full liquidity — use money freely
  • DLA £25,069 recovered tax-free
  • Full IHT planning options
  • No future SDLT, ATED, or CT600
  • Twin-year straddling saves ∼£6,000

Cons

  • CGT payable (but unavoidable)
  • HMRC clearance takes 3–6 months
  • IP fees £1,500–£3,500 + VAT
  • SA108 due 31 January 2027

Scenario B — Buy Another Property

Cons

  • Lanzarote CGT already crystallised — cannot undo
  • SDLT payable on new purchase
  • Annual CT600: £1,500–£3,000 pa
  • Another MVL required later
  • ATED if property >£500k
  • Capital completely illiquid
  • No reduction in CGT burden
  • TWO CGT bills when eventually unwound

Pros

  • Potential capital growth
  • Rental income (taxed at 25% CT)
  • … both available personally after MVL too
Verdict

Overall Score

Scenario A — Keep Cash

9.2/10
Tax-efficient, clean, flexible

Scenario B — Buy Property

2.4/10
Higher cost, no CGT benefit, illiquid

The Bottom Line

Reinvesting inside the company costs an additional £16,000–£35,000, delivers zero CGT reduction, locks Philip’s capital up for years, and still requires an MVL at the end. Complete the MVL now — then invest the clean personal capital however Philip chooses.

→ Philip’s Next Steps
1. No personal withdrawals from Los Romeros before MVL is complete.
2. Appoint a licensed IP via gov.uk/find-an-insolvency-practitioner
3. File Modelo 210 via Spanish gestoria before 20 July 2026.
4. Receive clean personal cash — then invest as he sees fit.

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