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Where Taxpayers and Advisers Meet

will ltd company formation save sdlt on my 2nd house?

xplicit.kaler
Posts: 1
Joined: Thu Oct 24, 2019 11:06 am

will ltd company formation save sdlt on my 2nd house?

Postby xplicit.kaler » Thu Oct 24, 2019 11:22 am

hi
sorry i sound misinformed or lack of knowledge as i am in this situation first time.
i am buying a new residential house and the house in which i am living at the moment will be rented out with new btl mortgage.
new house price is 192k and the house i am living in is valued at 140k
if i go with normal btl mortgage then for the 2nd house i have to pay £7100 sdlt as i will have 2 house on my name
if i form a ltd company and then sell my house to my ltd company at market price ( no cgt as i lived in this house for 5 years) then the new house will be the only house on my name as the old house is owned by company. this will save me extra 5% sdlt on my residential house.
though company has to pay sdlt also.
am i right doing this and will it really save me sdlt?
thanks

jerome.lane
Posts: 97
Joined: Mon Aug 12, 2019 8:41 am
Location: Camberley, Surrey
Contact:

Re: will ltd company formation save sdlt on my 2nd house?

Postby jerome.lane » Fri Oct 25, 2019 8:44 am

This is possible and you will pay £1,340 of SDLT on your new home and the company will pay £4,500 for the old one. you will save £1,260 in SDLT but you will also pay extra legal fees, land registry fees and then ongoing costs of operating a company. The saving could quickly evaporate although depending on your other circumstances and lending arrangements, a corporate structure could be useful.
Jerome Lane
Tax Advisor
jerome.lane@stewartco.co.uk
Stewart&Co.
Chartered Accountants
Telephone: 01276 61203


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