Transferring Buy to Let Properties into a Ltd Company

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    Transferring Buy to Let Properties into a Ltd Company

    Hi There

    When the Recession took place back in 2008 I invested in Buy to Let properties which Sky Rocketed I am now left in a situation where I would like to transfer them into a Ltd company can this be done without paying CGT & Stamp Duty? As I earn more from the properties than I do from my job and it is not tax efficient.

    I looked into incorporation relief and HMRC said that it would not be applicable to me as they are investment properties managed by a managing agent.

    Any help is highly appreciated.

    Many Thanks
    Super Rachman

    First of all, please change your user name (or retire it and create a new one), landlords have a bad enough reputation as it is.

    Second, why on earth do people ask HMRC for tax advice?
    The people you talk to are not qualified to give advice, but are more than capable of adding flags and notes to your records.

    In short, no you can't do what you suggest.

    There are companies and people out there who will propose that you can, by managing the properties via a partnership, which can then be incorporated using the incorporation relief.
    I have not heard of anyone managing this - outside of the case studies offered by the companies selling their services.

    When I post, I am expressing an opinion - feel free to disagree, I have been wrong before.
    Please don't act on my suggestions without checking with a grown-up (ideally some kind of expert).


      Hi Jpkeates

      Thanks for your response,

      First of all I will not be changing my username because I like it and its my choice not yours :-)

      Secondly I agree with your points about Partnerships I will further expand buy purchasing future properties via a limited company and keep the existing ones I own as they are.

      Many Thanks
      Super Rachman


        I am assuming that your current properties are held in your name only, if this is the case you are best advised to retain these in their current format on the following basis:-
        1) Any disposal into aLimited Company will be treated as a sale and incur the necessary CGT charges less the annual allowance existing at the time
        2) The Ltd Co would indeed become liable for the premium SDLT as this would have to be treated as a purchase and all the associated legal and valuations which that would involve.
        3) Your present lender , if it accepts such transfers, would require you to obtain anew mortgage at a company interest rate which could be more expensive than what you are paying at present.

        Before undertaking any further considerations into any transfer may I encourage you to speak with a good tax accountant, no one unless they hold such tax qualifications can proffer such accurate advice only what is understood to be the present situation.

        I think your final comments going forward is sound by acquiring new properties via a LtD company, the tax advantages as at present are better but who knows what the future will be.


          Hi Loanarranger

          Thanks for your post I totally agree moving forward what I will do is remortgage the maximum up to 75% across the whole portfolio and then use that as a deposit to purchase additional properties via a Ltd that way I will avoid paying a high tax bill.

          I intend on purchasing more properties as a business.

          Many Thanks
          Super Rachman


            A chancellor may well change tax rules on property held by companies to more equalise treatment.

            Chickens and counting ?
            I am legally unqualified: If you need to rely on advice check it with a suitable authority - eg a solicitor specialising in landlord/tenant law...


              As above, nothing you will get some us here will replace the professional legal advice you should get for yourself.

              I would suggest the investment in some professional advice before you move forward with your business plans will pay for itself many times over in the future.

              Boring I know ... sorry :-/


                Originally posted by loanarranger View Post
                1) Any disposal into aLimited Company will be treated as a sale and incur the necessary CGT charges less the annual allowance existing at the time.
                Could I just ask if it is possible to transfer from sole ownership to a limited company as a gift, ie no consideration, aside from the tax implications? I mean is it forbidden under company law or is it just how it is treated under tax laws?


                  Transferring as a gift is only marginally different from transferring for £0.01.

                  Do you completely own the company? If not, there may be an immediately chargeable event for inheritance tax, as well.


                    Forgetting about tax as it is a low value property anyway. Property owned by 1 person, transfer to company owned by that same 1 person, or possibly more than that same one 1 person plus another(s). Can the property be transferred for £0.00 consideration?


                      The property needs to be transferred at market value. You would actually need a valuation to do this properly


                        If tax was payable then this would also need to be paid


                          I regret to say that trying to circumvent the taxation regime is nigh impossible. Many have tried and few have succeeded without having recourse to very clever and expensive accountants, for most of us mere mortals we bite the bullet , wipe our eyes with a tissue and move forward.


                            Thanks for all your advice. I have to confess that the subject property is my Landlord’s whom is making out he can use a ground 6 to evict me (pre feb 1997 sitting tenant) and is transferring the property from his limited company to himself and I think may also plan to transfer it to a new company. As he (or rather his original company) is not the original owner it looks like he can't do it as the ground is not available for someone who later acquires the property for 'money or money's worth'.


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