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Where Taxpayers and Advisers Meet

Transfer of Residential Property to Company - Directors Loan Account

businessmind
Posts: 8
Joined: Sun Feb 07, 2010 6:33 pm

Transfer of Residential Property to Company - Directors Loan Account

Postby businessmind » Thu Oct 13, 2016 2:28 pm

I personally own a number of residential properties outright (without mortgages) which I let out. I am looking at transferring these into a new company in my sole ownership. I appreciate the transaction would have to be at market value and that I will pay CGT on the sale and the company will pay stamp duty on the purchase. The question is, can I create a directors loan on the balance sheet of the company equivalent to the value of the properties at the time of transfer, plus any cash I have loaned the company to complete the transaction? I understand I would then be able to repay this from the company over time without incurring an income tax charge (of course the company would pay corporation tax on it's earnings).

LozaACCS
Posts: 1504
Joined: Wed Aug 06, 2008 3:55 pm

Re: Transfer of Residential Property to Company - Directors Loan Account

Postby LozaACCS » Thu Oct 13, 2016 8:34 pm

You are correct, however it might be worth taking formal advice with a view to selling the properties for shares in the company, this would probably qualify for hold over relief under S162 TCGA 1992 so the capital gain could be held over.


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