Split the title

[DD55]

Morning All,
I have a detached building which is commercial office space on the ground floor and separate 2 bed flat on first floor.
Both under one freehold title in my personal name.
I wish to have the office as freeholder and the flat assigned on a long lease (999 yrs).
I have an existing portfolio managed by a flats management company and another company that is trading in property.
Can't remember why this detached building was ever structured this way but can I do the split without incurring a liability for transfer or any other tax that might occur ?
Many thanks for any response.
Dave

[bd6759]

I wish to have the office as freeholder

What does this mean? A building, or part of a building, cannot hold a title.

[maths]

As freeholder I believe you cannot grant a lease to your self. However, I also believe it is possible to transfer the freehold interest into your own name plus one other (eg spouse; son; friend etc). The latter would act purely as a nominee meaning that there is no disposing by you of any beneficial interest in the freehold and hence no CGT charge.

[DD55]

Thanks, this from my solicitor below....

Your accountant is best placed to advise on CGT. There will be no SDLT unless any consideration changes hands (consideration can include debts such as a directors loan due to a company).

What is important is to ensure that the freehold and leasehold are in different names. There seems to be two options:

1. We have a freehold title which includes the commercial unit and we just have one lease for the residential flat.
2. We have the freehold title in one ownership but subject to two long leases (one for the commercial unit and one for the residential unit).
In either case we need to decide who would own each interest. In scenario 2 the same entity/person can own both leases.


Seems it can be done, but if seen as a trade then would it invite a tax bill ? Mr Maths, I'll run it past him, sounds like a plan.