Transfer to Ltd Company & SDLT

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    Transfer to Ltd Company & SDLT

    Afternoon All,

    After much help from reading this forum I finally have question.

    I am just in the process of completing the transfer of my BTL into a ltd company.

    My solicitor has settled my personal mortgage and then taken out the new mortgage in the name of the Ltd Company. However I have received conflicting advice from the solicitor and my accountant.

    Solicitor is saying SDLT transfer value should equate to the value of the mortgage which has been redeemed. (in this case a value below SDLT threshold) And therefore pay no SDLT

    Accountant is saying SDLT transfer value should equate to market value of the property.

    Where I'm happy to avoid paying SDLT, I have budget the (rather large) amount, but Im concerned with a knock on the door from Mr HMRC at some point.

    So, who is right... Solicitor or Accountant?

    Thanks

    AJ1

    #2
    Whichever you go with, make sure they both have adequate professional indemnity insurance in place.

    Market value. (s53 Finance Act 2003)
    I am not a lawyer, nor am I licensed to provide any regulated advice. None of my posts should be treated as legal or financial advice.

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      #3
      Thank you, solicitors just confirmed its market value... damm. Never mind. Although I budgeted the SDLT anyway. Thank you again.

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        #4
        As far as I know the accountant is right. This is a sale to a separate party (the company) of the whole. It is NOT a gift of the whole to the company (as in a gift to another party) in which case the solicitor advice would apply. A gift without a mortgage to a person would have no SDLT. I doubt you can gift to a company (which would defeat the whole point of the exercise even if you could?).

        But more importantly, you have considered the CGT implications --- I hope...... SDLT may pale into insignificance.

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          #5
          I assume you have good reasons for transfer to a ltd company that far outweigh other issues? have you considered establishing a partnership and THEN moving to a ltd company? the reason I ask is because I am also considering it and will be booking an appointment with a recommended advisor in the near future.

          my reasons are purely to plan for inheritance tax (though we all know rules change as time progresses) and potentially reduced personal liability

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            #6
            This is not a transfer but a sale and purchase , On a personal basis there is the issue of CGT and for the Ltd co it is unfortunately a case where SDLT becomes payable . .

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              #7
              No CGT as I lived in the property for a fair amount of time myself. Thanks, SDLT paid. Now in a Ltd company. Thanks for all advice.

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