SDLT 3% surcharge because of a foreign property

[SDLTquestions]

I am looking for some advice.

Context:
I am a UK resident and an EU passport holder.
Before coming to the UK, I bought a flat (I will call it 'the old flat') in my home country and lived in it for about 3 years.
Over 10 years ago, I moved to the UK but kept that old flat.
I am currently buying a flat in London.

I would prefer not to pay the extra 3% SDLT surcharge when buying my new flat. The simplest solution is to sell the old flat, but unfortunately, I may not have enough time to do that before I complete on the new flat. And I wouldn't be eligible for a refund because the old flat wasn't my main residence at any time in the last 3 years.
Transferring it a UK-registered Ltd company I would own won't work as well, because the HMRC would treat the old flat as my property, even if it is owned indirectly.
But what if I were to open a company in my home country and transfer the ownership of the old flat, and I would be the sole owner of that company - would that constitute a second home for SDLT purposes?

[AGoodman]

"Transferring it a UK-registered Ltd company I would own won't work as well, because the HMRC would treat the old flat as my property, even if it is owned indirectly."

Why do you say this? I wasn't aware that such a company would be considered "yours" for SDLT purposes.

I thought such a transfer would work, albeit there are other taxes and costs involved, not least SDLT on the transfer to the company.
Transfer to a foreign company comes with additional admin as well as you need to register it on the register of foreign entities.

[bd6759]

Transferring it to a UK company will work. HMRC cannot ( in these circumstances at least) look through the corporate veil.

There would be no SDLT on that transaction because the property is not situated in England.

But you would be liable to UK Capital Gains Tax (subject to any double taxation treaty) based on the market value of the property.

[SDLTquestions]

Thank you both for your answers.

I have found this document online - https://www.lesserandco.co.uk/downloads/SDLT.pdf.
It states that:

Under the current SDLT rules, if you own more than 50% of the
shares in the limited company, the company’s property will be
considered as owned by you personally for SDLT purposes. However,
there is an exception to the higher rate of SDLT if you do not own
any other properties personally at the time of the purchase. In this
case, you may only have to pay the standard SDLT rates on the new
property purchase.

However, the two sentences seem to be contradictory.

Regarding the register of foreign entities, will that still be the case if both the property and the company are located/registered in another country? The only connection with the UK is that I, the sole shareholder, am a UK resident.
According to https://www.gov.uk/government/collections/register-of-overseas-entities, the register is only for foreign entities that want to buy and sell property or land in the UK.

Sorry if I sound daft - this is all very new to me.

[maths]

Not quite sure of the authority for the Lesser & Co quote to which you refer.

[bd6759]

The sentences are contradictory and, frankly, nonsense. There is no such SDLT rule (current or historical) for purposes of the HRAD.

[SDLTquestions]

Thanks for the clarification.
That was the only place where I found it.
Lesson learnt - even if a website looks professional, it doesn't mean that the content is accurate.

[maths]

Out of interest you might email Lessewr and ask them for their justification.