Principal residence transfer to LTD question

[ltd101]

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]

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

[section 44]

No SDLT

... section 53 market value charge - no?

[maths]

Highly likely s53 will apply.

[bd6759]

Agreed - transfer to a company. Doh!

[ltd101]

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]

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]

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]

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).