Transferring properties from my wife to limited company

[Tokenspire]

For investment my friend & I bought two houses (60k each) to live in (separately) in my wife's name. My friend had a deed of trust set up for his share of the deposit and ownership for both houses. This was done since my friend and I were students and could not obtain a mortgage, unlike my wife who was PAYE. We have moved out now for over a year and the properties have been left vacant. We have now decided that we want to start letting them out and re-mortgage the properties (worth 175k each) to release some equity and so that we can buy more properties. We would like to transfer the properties in our names whilst re-mortgaging and set a limited company. As I understand it we would have to 'buy' the houses from my wife, but we would be using 'her' money to do so! What are the tax implications of all this and by whom are they payable? I realise that we may not have made the best choices in the past but I am where I am now and looking to move forward. Your help would be greatly appreciated.
Many thanks in advance

[rebeccam@myersclark.]

These are complex matters. Broadly speaking if your wife was to transfer any property to you then it would not be liable to capital gains tax, however as the properties are mortgage there are stamp duty land tax issues with the transfer of the mortgage.
It is more complex where your friend is concerned. If she were to gift property to your friend then she will be deemed to have sold it at market value and will be liable to capital gains tax on the increase in value.
I am unsure why you wish to transfer the properties to a limited company. If you are going to be purely letting out the properties then your company is unlikely to be classed as trading and instead will be an investment company and liable to corporation tax at the maximum rate.

If you would like to discuss this further in a professional capacity please contact me on:

rebeccam@myersclark.co.uk

Rebecca Mitchell CTA