Selling off part of property to wholly owned sole trader company

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

    Selling off part of property to wholly owned sole trader company

    Hi,

    I'm after a bit of general advice before I start to spend any money.

    I own a house which has a granny flat/annexe at the bottom of my garden.

    I am looking at buying a bit of land from my neighbour to build a separate drive to this annexe with a view to separating it off to rent out/sell. I don't forsee any planning issues with this and my mortgage company "in principal" have no issue with it. I would look to register the annexe fully as a separate property.

    My only issue is that the annexe is quite close to my house and giving up control (ie: selling it) would make my a little uncomfortable. I would prefer to keep control of the property and rent it out however would also like to realise a lump sum from it! I have been toying with the idea of separating the property and then selling it to a sole trader company which is wholly owned by me. The sole trader company would raise a buy to let mortgage on the property and I would have the best of both worlds - lump sum raised and I also keep a control on who can occupy the property.

    My question is whether the above is viable and worth pursuing? I understand that accounts would have to be completed for the sole trader but wondered in the eyes of the law whether this would be correct?


    Many thanks

    #2
    There is no such thing as a 'sole trader' company. Now you can own a company and be the only shareholder but that is not a 'sole trader'.

    I suspect a newly formed company with no accounts would find it difficult to raise a mortgage at sensible rates.

    Why don't you simply get a mortgage in your own name against the property?

    Comment

    Latest Activity

    Collapse

    • Reply to SDLT relief for multiple dwellings
      by BIGGYBIBIG
      Well after emailing and chatting to around 20 solicitors and accountants i finally found someone who specializes in these matters.

      Took a lot of time and effort but instead of over £21,000+ its actually £9,250 which is a saving of £12k, phew just shows you that many solicitors have little...
      13-08-2022, 18:25 PM
    • SDLT relief for multiple dwellings
      by BIGGYBIBIG
      Hello everyone,
      I have had an offer accepted on a property purchase, subject to a surveyors report of £395,000 in England.


      I am currently looking at surveyors but i just wanted to know where i stand in terms of stamp duty, costs etc.

      I have phoned 5 different solicitors
      ...
      10-08-2022, 19:20 PM
    • Sunday Times Report 7 Aug 2022 ( on Welsh holiday lets.)
      by Gordon999
      This report was about a retired solicitor living in Cardiff , with 2 holiday lets in Solva , Pembrokeshire. His properties only let for around 18 weeks a year but Welsh Government require 26 weeks letting to qualify for business rates. The increase in council tax to treble rate compared to rate...
      13-08-2022, 17:22 PM
    • Giving/Gifting House to Kids
      by Tony-Edwards
      Elderly parents in early 80s, one in not so good health.

      Lived in the same home (no mortgage etc) for 50+ years - now worth approx £180,000 - £200,000 and they have minimal savings.

      Looking ahead, if one has to go into care (or council provided home care) I understand there...
      11-08-2022, 11:12 AM
    • Reply to Giving/Gifting House to Kids
      by gnvqsos
      Did the labouring job jeopardise his position at Royal Mail? lt is strange no contingency fund was taken on holiday.. I don't think it makes sense to purchase, and insure/maintain a camper van to save on 7 days accommodation.The typical cost including depreciation exceeds £1500 pa...
      13-08-2022, 14:54 PM
    • Expense Categories
      by philrosenberg
      I'm just in the process of buying my first property as a Ltd company and I have gotten FreeAgent accounting software free with my bank account.

      I have a list of categories to assign to my expenses, but they aren't all that relevant to residential property businesses. I wondered if others...
      13-08-2022, 10:53 AM
    • Reply to Expense Categories
      by theartfullodger
      The old saw was that you had 3 sets of accounts....
      ​​​​​​- one for yourself
      - 2nd for tax man
      - 3rd for wife/husband/partner
      How does your chosen software handle this?...
      13-08-2022, 12:14 PM
    • Higher rate LTT or not?
      by AddictedMonster
      Hi my partner and I are looking to sell one of our rentals and our residential property and buy a larger property.

      I'm confused whether we will be charged the higher rate land transaction tax due to owning a third property that we own that will not be sold as of yet. It was our previous...
      13-08-2022, 11:26 AM
    • Reply to Higher rate LTT or not?
      by AddictedMonster
      Thank you very much. I appreciate the information.
      13-08-2022, 12:04 PM
    • Reply to Expense Categories
      by AndrewDod
      What you record for your own purposes is up to you, but for purposes of tax return, for just one property, and rent < 80K, can just pop it all into "Other expenses" - so long as you can resurrect it when HMRC audits you.

      At least that applies to individual self assessment,...
      13-08-2022, 11:57 AM
    Working...
    X