transfering assets to a limited co

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    transfering assets to a limited co

    I already own 10 properties together with my brother, however some are in my name some are in his!, we have both just moved out of our primary residences and would like to transfer them into a newly formed limited company, however I am being told that these could constitue a linked transaction and although individually they are below the stamp duty theshold they could be classed as a single transaction and therfore subject to stamp duty! is this right?

    #2
    Originally posted by fudge View Post
    I already own 10 properties together with my brother, however some are in my name some are in his!, we have both just moved out of our primary residences and would like to transfer them into a newly formed limited company, however I am being told that these could constitue a linked transaction and although individually they are below the stamp duty theshold they could be classed as a single transaction and therfore subject to stamp duty! is this right?
    I am not a lawyer, but this is what I believe to be the case.

    Also, did you realise that your transfers to the company may be regarded as a transfer to a connected person at open market value? If so, this would give rise to Capital Gains Tax.

    Ramnik
    Private advice is available for a fee by sending a private message.

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      #3
      Originally posted by fudge View Post
      I already own 10 properties together with my brother, however some are in my name some are in his!, we have both just moved out of our primary residences and would like to transfer them into a newly formed limited company, however I am being told that these could constitue a linked transaction and although individually they are below the stamp duty theshold they could be classed as a single transaction and therfore subject to stamp duty! is this right?
      Well, is it a sale/purchase or a gift?
      Gifts don't carry SDLT, no matter how many or how big.
      More likely to be for value (eg shares in company?)
      If each one is a sale/purchase, you could still do them entirely separate from each of the others. If val < £125 000, no SDLT to pay.
      JEFFREY SHAW, solicitor [and Topic Expert], Nether Edge Law*
      1. Public advice is believed accurate, but I accept no legal responsibility except to direct-paying private clients.
      2. Telephone advice: see http://www.landlordzone.co.uk/forums/showthread.php?t=34638.
      3. For paid advice about conveyancing/leaseholds/L&T, contact me* and become a private client.
      4. *- Contact info: click on my name (blue-highlight link).

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        #4
        Related transactions

        Originally posted by jeffrey View Post
        If each one is a sale/purchase, you could still do them entirely separate from each of the others. If val < £125 000, no SDLT to pay.
        No Jeffrey, that's not correct.

        Fudge, those transactions are definitely related and Stamp Duty Land Tax will be applicable to the whole thing. Here's the proof from the horse's mouth HM Revenue & Customs

        I don't know what you're trying to achieve exactly, but it'll cost you a lot more than you think. Perhaps future purchases could be made by the new company instead of yourselves as individuals.

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          #5
          Originally posted by Poppy View Post
          No Jeffrey, that's not correct.

          Fudge, those transactions are definitely related and Stamp Duty Land Tax will be applicable to the whole thing. Here's the proof from the horse's mouth HM Revenue & Customs

          I don't know what you're trying to achieve exactly, but it'll cost you a lot more than you think. Perhaps future purchases could be made by the new company instead of yourselves as individuals.
          I think that I disagree. If each one is separately documented and in no way legally connected with others, so any of them stands alone with no linked obligations to complete, they are surely not related.
          JEFFREY SHAW, solicitor [and Topic Expert], Nether Edge Law*
          1. Public advice is believed accurate, but I accept no legal responsibility except to direct-paying private clients.
          2. Telephone advice: see http://www.landlordzone.co.uk/forums/showthread.php?t=34638.
          3. For paid advice about conveyancing/leaseholds/L&T, contact me* and become a private client.
          4. *- Contact info: click on my name (blue-highlight link).

          Comment


            #6
            Further to my previous reply above, there may be a possibility of being able to transfer the properties to the company effectively at cost price. Any pregnant gain will only catch up if and when you sell the shares in the company.

            This is not certain and you must seek professional advice before relying on this.

            But remember that disposals of properties by the company do not benefit from Taper Relief, Private Residence Relief, Lettings Relief or Annual CGT allowance. A company only benefits from Indexation Allowance which is very negligible these days.


            Ramnik
            Private advice is available for a fee by sending a private message.

            Comment

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