Residential to LTD BTL stamp duty on new house?

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  • ATC
    replied
    One correction to the above small self administered pension schemes can and usually are written in trust so that the lolly is outside one's estate for IHT

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  • Mike511
    replied
    Cheers Gordon, I think that is probably more than I would be interested in. I just read I might be exempt from the cgtax as its been my main residence for a while.

    Thank you all for the advice around the stamp duty!

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  • Gordon999
    replied
    Also when the house valued over £0.5 Mil is owned by a company , the company has to pay ATED tax ?

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  • Gordon999
    replied
    Can I buy a house with my pension fund?

    Technically, you can buy residential property with your pension fund, but HMRC will hit you with a hefty taxable bill. This includes buy-to-let properties, which makes this route financially unviable, in the majority of cases.

    Also, buying a house with your pension would mean it would form part of your estate and would be subject to inheritance tax after your death and any investment gains could also be taxed.

    You can use your pension to buy residential property through a Residential Property Fund. But bear in mind that you won’t have control over which properties are invested in and you will also likely be hit with fund management fees and charges.

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  • loanarranger
    replied
    Mike, ATC makes an interesting suggestion but speak with a good accountant , he will explain all the positives and negatives surrounding your proposition then you can make a considered decision.

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  • Mike511
    replied
    Originally posted by ATC View Post
    probably your best bet is to pop it into a small self administered pension fund; the stamp duty land tax is an absolute bugger if you'll pardon my French,
    Can you please explain further this option?

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  • ATC
    replied
    probably your best bet is to pop it into a small self administered pension fund; the stamp duty land tax is an absolute bugger if you'll pardon my French,

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  • Mike511
    replied
    Originally posted by loanarranger View Post
    Thanks Mike511 for clarifying it.
    So to summarise.

    Property ABC will be sold to LTD company, the Ltd company will pay stamp duty.

    I will personally pay cg tax, which I would pay anyway in any sale right? (does anyone have a good website I can use to plug in some numbers?) I've tried Google but can't work out if they are good.

    Then I can proceed to buy a residential property as I won't technically a property in my name, so I won't have to pay the additional stamp duty?

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  • loanarranger
    replied
    Thanks Mike511 for clarifying it.

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  • Mike511
    replied
    Originally posted by loanarranger View Post
    And let’s not forget that as you are paying rent on another property one has to assume rightly or wrongly that your “ main residence” is being let , if the answer is yes then the rental has to be declared to HMRC and if there is a mortgage did you gain a Consent toLet ?
    I've owned it for 8 years and have always lived there but I also work away a fair bit so also usually rent another place during the week. The property has never been let to anyone in that time, it's only now that I've decided to let it or transfer it to a Ltd company.

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  • loanarranger
    replied
    And let’s not forget that as you are paying rent on another property one has to assume rightly or wrongly that your “ main residence” is being let , if the answer is yes then the rental has to be declared to HMRC and if there is a mortgage did you gain a Consent toLet ?

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  • AndrewDod
    replied
    It is a matter of fact where your primary residence is. The Council Tax payment is only relevant if it is your primary residence in every respect (the address the tax office have for you, where you actually live, that you have no other main address at all, --- if you have more than one address you can nominate in advance one of them as your primary residence (if it is actually that).

    And it is not just a final status -- it depends on the status for the entire period of time of ownership.

    How long have you had it, how much did you pay, what will it sell for, have you ever actually lived there....

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  • Mike511
    replied
    Originally posted by AndrewDod View Post

    From CGT p,o.v it matters not that "the house has not yet been let", but rather that you were/are not living there as your PPR (you said "I'm already renting"). Be sure to declare it very shortly after the sale.
    Thanks but does it matter if I'm still on the council tax for the address at ABC but also renting elsewhere and paying council tax there too?

    Is there a formula sheet I can find to try to work out what the CGtax would be?

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  • AndrewDod
    replied
    Originally posted by Mike511 View Post

    Thanks I agree with you, the house hasn't been let yet or started generating any income so the let will start after it transfers to the Ltd company. Thanks for this detailed explanation, I will ask for further advice from the accountants but I just wanted to confirm from people here who may have experienced this before. I will keep this thread up to date if and when the transaction completes.
    From CGT p,o.v it matters not that "the house has not yet been let", but rather that you were/are not living there as your PPR (you said "I'm already renting"). Be sure to declare it very shortly after the sale.

    Leave a comment:


  • Mike511
    replied
    Originally posted by loanarranger View Post
    Mike 511, Your assumption is indeed correct. The property is Not being transferred as there is no case to support this assertion. You have decided to sell it to Ltd Co X which itself will have to satisfy the Solicitors of the source of monies to be used in the acquisition and it will have to pay the standard SDLT. If the property has been let then the CGT liability kicks in . My advice is if indeed you are not already doing so is to ensure you keep HMRC onside by ensuring that you have disclosed all the income being derived from Land & Property.

    Again speak to an accountant regarding the entire process , do not accept such assurances from anyone including mortgage brokers , we as an entity have a good grasp of such fundamentals but the defining advice emanates from this professional group.
    Thanks I agree with you, the house hasn't been let yet or started generating any income so the let will start after it transfers to the Ltd company. Thanks for this detailed explanation, I will ask for further advice from the accountants but I just wanted to confirm from people here who may have experienced this before. I will keep this thread up to date if and when the transaction completes.

    Leave a comment:

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