Company buying residence

by **Kitty Kat** on Wed Dec 07, 2011 10:19 am

I buy a house (non first time buyer) for £300,000. I pay 3% SDLT.
Instead I form a company which buys the house. The company pays 3% doesn't it? I am being told by a client that there is some dodge whereby incorporating reduces or even eliminates SDLT on the purchase of a residential property. Google says not, or at least doesn't confirm the client's opinon, but SDLT is so far from my thing it's insane.

by **Generix** on Wed Dec 07, 2011 2:23 pm

Kitty Kat wrote:I buy a house (non first time buyer) for £300,000. I pay 3% SDLT.
Instead I form a company which buys the house. The company pays 3% doesn't it? I am being told by a client that there is some dodge whereby incorporating reduces or even eliminates SDLT on the purchase of a residential property. Google says not, or at least doesn't confirm the client's opinon, but SDLT is so far from my thing it's insane.

Not really my thing either, S44 is the guru on this. I hate all things land law related.

My comments which are best ignored are:

Pretty sure SDLT is applied equally to any type of entity, it is the nature of the transaction and the value which can be manipulated to avoid/reduce it, although perhaps in some cases it requires specific entities, most planning I have seen involves trusts and or partnerships though.

by **pqtaxation** on Wed Dec 07, 2011 3:56 pm

These (offshore) company schemes have got a lot of publicity.

No SDLT saving on initial purchase.

But on following sale(s), it is shares of owning company that are sold not the residential property - so savings on SDLT and potentially on IHT at death if non dom.

PLUS no need to inform Land Registry and no change of value or ownership is on public record at LR.

But for an ordinary, low-profile UK resident and domiciled buyer and UK company, these advantages, including saving on SDLT, are more than offset by loss of PPR relief on capital gain, benefit in kind charge to UK director/employee and expense of corporate structure.

However I know UK residents/doms, with a high value London residence and a high profile, who have gone for offshore corporate ownership for the perceived net advantages.

by **section 44** on Wed Dec 07, 2011 3:58 pm

For an acquisition from a third party, a company purchaser would pay the same amount of SDLT as an individual.

I suspect that either:

1. they are wrong;

2. the acquisition isn't from a third party; or

3. there is some form of SDLT planning/avoidance.

by **Kitty Kat** on Wed Dec 07, 2011 4:46 pm

section 44 wrote:For an acquisition from a third party, a company purchaser would pay the same amount of SDLT as an individual.

I suspect that either:

1. they are wrong;

2. the acquisition isn't from a third party; or

3. there is some form of SDLT planning/avoidance.

I think it is 1., namely a man from the pub said it. Perhaps not literally, but it wasn't anyone who I would think knows some amazing scheme, I would expect they have misunderstood something someone has told them.