Moving properties into Ltd Co

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    Moving properties into Ltd Co

    I own a semi commercial property from which I run a business and rent to flat above. The outstanding mortgage is £70k.
    I wanted to pay off the £70k and then transfer the property into a limited company but I don't understand if I can transfer the property no outstanding mortgage balance.

    I know that the Limited company has to buy the property at the market value but I can't get my head around the tax and transfer.

    The original purchase price was £131k
    The current valuation is £140k

    Currently in mine and my wifes name.

    #2
    The property is registered under your name ( or with wife in joint name ) at Land Registry and your Mortgage Lender has registered a charge on the property title which means you cannot sell without paying off the loan.

    When you pay £70K to the reduce the loan account to zero , you can ask the mortgage lender to remove the charge at Land Registry.

    Then you are free to sell property to the company at £140K. ( probable company does not pay any sdlt , if starting level to pay is £150K for commercial property. ) .

    In your next tax return , you + wife declare capital gains calculated at £140K - £131K = £9K or £4.5K each.

    Since you can claim capital gains allowance of £11,500 , there is no tax to pay.



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