Stamp Duty Exemption - Property Transfer to Company from Partnership

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    Originally posted by Sean Hughes CTA View Post
    1) for the SDLT exemption the partnership doesn't have to be managing a business. You are getting confused with the CGT relief (incorporation relief) which requires a business to be conducted
    Yes, I think I am.

    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).


      we currently own 6 properties jointly, on our tax returns we are taxed on a 99%/1% after submitting a letter a couple of years ago to the tax office. does that demonstrate a partnership? we want to keep and expand our portfolio and potentially hand it over to our children eventually. the 'limited liability' aspect appeals to me as though we keep put properties in good order, tested etc in line with legislation, reducing our personal liability might be an option we would pursue.

      doing it without paying stamp duty also has its appeal !!


        Was it a form 17 you submitted?
        If so, that is helpful but if I were advising you I would suggest you make the partnership more formal to put the question of whether there is a partnership beyond doubt.


          yes it was, how would I make it more formal? would that require another letter to the tax office or is there a specific form/process. I'm not in any rush but am strongly considering it. I realise I will need to take specific legal advise to progress it fully but if there are things I can put into place beforehand then it might ease the process,

          I do have an accountant but she is not a specialist property accountant


            I would suggest notifying HMRC of the partnership. Getting a partnership UTR. Having a partnership agreement and a partnership bank account.


              I have a somewhat similar situation. My brother and I own residential let property jointly in our names for some years and have an HMRC partnership UTR for partnership tax returns as well as a Partnership Mortgage Loan and Partnership Bank Account with the same bank for a couple of years.. Recently we have appointed an accountant and the accountant thinks that any new tenancy agreement should be in the name of the partnership as the landlord rather than the partners... Does anyone have a view?


                I can see where they're coming from.
                One of the current clever ideas to avoid SDLT is to have the property business as a partnership and be a real business that the partners actually work in (rather than being a passive investment business).
                The argument is that you can then move the assets into a business by incorporation, which avoids the SDLT.

                That process seems untested and may not actually work, but it might.
                And there's probably not a downside (or at least one hasn't occurred to me in the last few minutes).
                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).


                  Both partners in the partnership would have to be working full time of 35 hours per week or atleast 20 hours per week each in the letting business ????.


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