Transferring individually owned property to LTD Co

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    Transferring individually owned property to LTD Co

    I wonder does anyone know of any successful transfers of residential investment property from individually owned to a Ltd Co without incurring Capital Gains Tax. I have read that there is a possibility of this qualifying for section 162 TCGA relief. I have been told by my own accountants that I would have to pay the CGT on transfer but I am not convinced this is so. I would love to know if anybody has managed to transfer and benefitted from the incorporation relief and not had to pay CGT on the transaction.?

    #2
    Try it! I don't think it would qualify. At the last property tax forum I went to, the changes from section 24 were covered in detail - most of us know that many LLs will now try and incorporate. TCGA relief was mentioned, and opinion was unanimous that LL incorporation would not pass the test - unincorporated property business have never really been considered "businesses", so to try and get relief based on transfer of a business of going concern is stretching it.

    But why not try - there is no relevant case law that I'm aware of. I would think, however, that HMRC would be very keen to fight this one.....

    All more eloquently described below.

    http://www.taxadvisermagazine.com/ar...ental-business

    Comment


      #3
      There are some advisors who claim that if you can show that you have been operating as a business prior to the transfer for a number of years (you have a number of properties and it takes a reasonable amount of time every month) you can make the transfers without CGT.

      No one has shown that anyone has actually done this - and HMRC can challenge any such transfer for a number of years.
      When I post, I am expressing an opinion - feel free to disagree, I have been wrong before.
      Please don't act on my suggestions without checking with a grown-up (ideally some kind of expert).

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