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Where Taxpayers and Advisers Meet

Private residency into LTD Company Strategies?

rogermelly
Posts:1
Joined:Tue Aug 08, 2017 11:00 pm
Private residency into LTD Company Strategies?

Postby rogermelly » Tue Aug 08, 2017 11:10 pm

I have a private residency with a 140k mortgage for a home worth 400k (ish) - I have 200k savings in my LTD (sole director, no employees) company and rising.

I plan to go abroad (but stay a Tax resident) and wanted to start to rent out my property - but would like to pay off the mortgage using the money in my LTD.

I have no intention of selling my property ever as I want to use it as regular income instead of a pension - for which I have none.

What strategies are available to me?

--Is Sell House (Privately), Buy House (as LTD) the only way?
--I hear things about Deeds of Trust? Is that a viable route, what is it?
--Any other options available?
--Or is there another way other than taking it into my existing LTD? New LTD or something else?

Thanks

SteLacca
Posts:448
Joined:Fri Aug 07, 2015 2:17 pm

Re: Private residency into LTD Company Strategies?

Postby SteLacca » Wed Aug 09, 2017 11:01 am

You say it's a private residence, but is it currently (and has it been during the whole period that you have owned it for) your principal private residence. If so, you will escape any capital gains tax charge on sale to your company. In such circumstances you could realistically sell it at full market value to the company, with the unpaid balance credited to your director's loan account.

The company would, however, still be liable to stamp duty on the sale.

A further consideration, whilst not immediately relevant, is the annual tax on enveloped dwellings, which applies to residential property held by a non-natural person (e.g. a limited company) and valued at more than £500,000, which gives rise to an annual payment based on a sliding scale. The value threshold was reduced from £2m to £500k between April 2013 and April 2016, and there is no guarantee it won't be reduced further. Even if it isn't, as the value of the property increases you could be exposed to ATED further down the road.


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