First of all determine the scenario company.
If its not in the business of selling land then..
*How long have they owned the land. If less than 5 years then its taken that it was for speculative purposes hence a Capital gain taxable at 30%.( Ascertain the book value)
*5% Withholding tax if they choose to distribute dividends, however there is more information on how to do this.
*As per the dividend policy you cannot distribute dividends on sale of assets. Liable for prosecution.
*If land owned more than 5 years then shall not be subject to taxation as its a form of asset disposal.
*If they paid dividends to the members without the 30% the the company shall take the burden.
Scenario two is when the company is in the business of selling land. Is this the case.??
By the way Tax Law on Capital Gains is some how silent. As per the new measures contained in Finance minister Uhuru Kenyatta’s Budget proposals require real estate developers and land dealers to pay taxes on gains made from the appreciation in the value of properties sold. Kenya Revenue Authority (KRA) has since issued a directive asking dealers in immovable property to pay taxes on capital gains made in their transactions. Read More
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