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Where Taxpayers and Advisers Meet

Principal residence transfer to LTD question

ltd101
Posts:47
Joined:Sat Feb 16, 2013 9:54 am
Principal residence transfer to LTD question

Postby ltd101 » Sun Dec 20, 2015 10:33 pm

Husband & Wife own principal residence without mortgage. If they transfer to their own company (at market value), clearly no CGT will be due but will they have to pay SDLT?

A few websites that I have read argue that there are some BIG exceptions for transferring primary residences to LTDs, presume they are just referring to the lack of CGT to pay?

http://www.property-tax-portal.co.uk/taxarticle2.shtml

bd6759
Posts:3549
Joined:Sat Feb 01, 2014 3:26 pm

Re: Principal residence transfer to LTD question

Postby bd6759 » Sun Dec 20, 2015 11:48 pm

No SDLT, but why transfer their residence to a company? That creates tax liabilities.

section 44
Posts:4467
Joined:Thu Oct 30, 2008 12:47 pm

Re: Principal residence transfer to LTD question

Postby section 44 » Mon Dec 21, 2015 10:24 am

No SDLT
... section 53 market value charge - no?

maths
Posts:8237
Joined:Wed Aug 06, 2008 3:25 pm

Re: Principal residence transfer to LTD question

Postby maths » Mon Dec 21, 2015 1:42 pm

Highly likely s53 will apply.

bd6759
Posts:3549
Joined:Sat Feb 01, 2014 3:26 pm

Re: Principal residence transfer to LTD question

Postby bd6759 » Mon Dec 21, 2015 8:01 pm

Agreed - transfer to a company. Doh!

ltd101
Posts:47
Joined:Sat Feb 16, 2013 9:54 am

Re: Principal residence transfer to LTD question

Postby ltd101 » Mon Dec 21, 2015 11:01 pm

Thanks a lot, reason is that if I am struggling to sell my primary residence but want to buy another, I could transfer my existing primary into my property investment LTD at current market value & then buy my next primary residence without the 3% second property surcharge. Or at least that was my thinking.

The other option is for it to be a furnished holiday letting

ltd101
Posts:47
Joined:Sat Feb 16, 2013 9:54 am

Re: Principal residence transfer to LTD question

Postby ltd101 » Mon Dec 21, 2015 11:04 pm

Sorry section44 does that mean I would need to pay SDLT for transferring to my LTD then or I wouldnt for my primary residence?

section 44
Posts:4467
Joined:Thu Oct 30, 2008 12:47 pm

Re: Principal residence transfer to LTD question

Postby section 44 » Tue Dec 22, 2015 11:43 am

Sorry section44 does that mean I would need to pay SDLT for transferring to my LTD then
Your company would have an SDLT liability, assuming that the market value exceeds the nil rate threshold

maths
Posts:8237
Joined:Wed Aug 06, 2008 3:25 pm

Re: Principal residence transfer to LTD question

Postby maths » Tue Dec 22, 2015 7:05 pm

Until the final legislation is known re the 3% surcharge there is no guarantee your suggestion would be effective (particularly if, as no doubt is the case, that you/spouse control the company).


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