Stamp duty exemption - transferring properties to limited partnership

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    Stamp duty exemption - transferring properties to limited partnership

    I have a few rental properties (2-bedroom apartments) in Manchester downtown. I am planning to keep these rental properties for long term and I do not intend to sell them. I want to transfer these properties into a company so that it will be easier to pass on the ownership to my children later on. But I know that it would incur stamp duty. I heard that transferring properties to limited partnership does not incur stamp duty. Is that true? If so, I can then put the limited partnership in to a limited company. By this convoluted route, I can transfer the properties into a company without incurring stamp duty. Does it sound feasible? It will be great if someone can kindly shed some light. Thanks.

    PS: or if you have other suggestions for tax-efficient way of passing on properties, please also kindly share some thoughts.

    #2
    You need to ask a qualified tax accountant and their expert advice and service does not come free. The firm, below , thinks you will have trouble convincing the Taxman a limited partnership exists simply by owning some property.

    http://www.optimiseaccountants.co.uk.../#.Wi-yWUqWaUk

    Comment


      #3
      I don't see why moving the properties into a business makes it "easier" to pass on properties to your children.
      There might be other reasons that that change might be appealing, but inheritance isn't an obvious one.

      You might want to talk to a family solicitor about your options, which should include the option of a trust.
      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).

      Comment


        #4
        It may be possible for you to transfer the properties into a limited company free of SDLT. Have you been operating in partnership with, say a spouse?

        Comment


          #5
          jpkeates,

          I know someone who did that so he could leave equal shares in the company to his children in the company as he had more children than properties. He felt it would be more complicated to sell the properties to leave the money to his children.

          Comment


            #6
            Everyone's financial situation is different, so it's not possible to give general advice, solutions appropriate for one person may not be the best for someone else.

            There are advantages in property being willed - there's a longer period over which any IHT can be paid, and it can be paid in instalments.
            The value of shares in the company are taxable on probate and are payable in full.
            Obviously, that matters differently depending on the size of the estate.

            Using a trust means that ownership can be transferred outside of an estate completely (and separates the title from the beneficial owners, which avoids the SDLT that the company may have to pay - as well as not triggering any CGT for the seller).

            It's more than possible that these aren't issues, or that there are other benefits in using a company.

            My main point should probably be, don't have a solution and then try and implement it.
            Have a desired outcome, and talk to some experts.
            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).

            Comment

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