Transfer to Ltd Company & SDLT

Collapse
X
  • Filter
  • Time
  • Show
Clear All
new posts

    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.

    Comment


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

      Comment


        #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.

        Comment


          #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

          Comment


            #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 . .

            Comment


              #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.

              Comment

              Latest Activity

              Collapse

              • Allowable expenses on property income
                Landlord123!
                Hi,

                Are the following costs allowable (tax deductible) expenses on property income?

                1. Accountant fees for compiling and submitting my self assessment every year.

                2. Legal fees for transferring the ownership of the property from my sole name to joint names (with...
                25-05-2018, 11:30 AM
              • Reply to Allowable expenses on property income
                jpkeates
                I don't see that.

                A fee paid to a solicitor for legal advice or for conveyancing is not a "fee paid for ...registration of title on property purchase".
                That's something that would be paid to the land registry.

                It's an anomalous exception in any case, because...
                26-05-2018, 09:40 AM
              • Reply to Allowable expenses on property income
                AndrewDod
                Correct. And not legal fees relating to this aspect either....
                26-05-2018, 09:11 AM
              • Rent a room scheme
                K335D
                Hi,

                I have read up on this subject but I am unclear re the following scenario.

                I own my own home in Glasgow. This is my only home.

                I have been made redundant, and my work is offering relocation to London.

                I would like to retain my home in Glasgow -...
                24-05-2018, 13:59 PM
              • Reply to Rent a room scheme
                theartfullodger
                Gordon spot on, but in Scotland a lodger is does not have a licence but a "common law tenancy" (paperwork suggestions Gordon makes I'd agree with...) and if he doesn't go when asked you need a Sheriff Court decree - see...
                https://scotland.shelter.org.uk/get_...vice_topics/re...
                26-05-2018, 08:43 AM
              • Reply to Rent a room scheme
                Gordon999
                There is nothing to prevent OP keeping his home in Glasgow and taking on a lodger.

                But the lodger must be covered by a licence stating the payment of rent ( weekly or fortnightly or monthly ) and what notice period must be served to quit by each side .

                https://www.gov.uk/p...
                26-05-2018, 04:16 AM
              • Reply to Allowable expenses on property income
                Gordon999
                The Notes for SA105 Tax return gives the expenses for entering in box 27 as shown below :

                Box 27 Legal, management and other professional fees

                You can claim:
                • management fees paid to an agent for rent collection, advertising and administration
                • legal and...
                26-05-2018, 02:10 AM
              • Reply to Allowable expenses on property income
                AndrewDod
                I am not sure I agree on the legal fees for transferral jp.

                Take spouse part out of it as that complicates it. If I were to transfer part of a property to my friend, that cost of transfer would be capital and offset against later capital gains. Not really different from selling the whole...
                25-05-2018, 19:14 PM
              • Reply to Allowable expenses on property income
                jpkeates
                If the property is let or about to be let, 2 is definitely allowable.

                1 is debatable.
                It's something that everyone does (including me), but it probably fails the solely and exclusively test, so it probably shouldn't be allowed.
                For many people, the need for it arises as a direct...
                25-05-2018, 12:42 PM
              • Reply to Rent a room scheme
                jpkeates
                There's a significant difference between a main residence for tax purposes and a main residence for a property licence.
                You can nominate your principle residence for tax purposes (as many MPs do) which is fine for tax purposes.

                It doesn't have the same effect when it comes to determining...
                25-05-2018, 09:35 AM
              Working...
              X