Capital Gains Tax etc

[Court123]

Good morning all.
We (my wife and I) have a small (mainly commercial) property portfolio which we would like to transfer the property into new Limited Company and issue the shares back to us. I understand from our solicitor there would be no SDLT to pay but he does not know about any Capital Gains Tax. Can anyone advise ?
Thanks for any help.

[bd6759]

Both are likely to apply, depending on precise terms transaction.

[AGoodman]

Both SDLT and CGT apply as if it were a market value disposal.

The only exception is incorporation relief but this only works if you are transferring a business and, for SLDT, if the current business is a partnership.

[Court123]

Thank you for the replies.

Seems to be a mine field.

Our solicitor has confirmed that we wouldn't pay SDLT, I will check why he thinks that. I think as its our main business that we had for over 30 years we may be able to claim incorporation relief. all the properties are joint names apart from onw which is in mine.

What we are trying to achieve is I guess two fold, any help advice would be appreciated :-

1/ Over 3 of our commercial units we have 3 self contained flats which at the moment are all on the same freehold title as the retail units below. Our thinking is (hence the first question) to transfer the freehold to a Limited Company and issues 125 leases back to us on each of individual flat so we can have BTL mortgages which would pay off our high interest commercial bank mortgage. As at that point there would be no increase in value we thought there would be no CGT to pay.

2/ Retirement planning as we are in our 70's.

Regards

[AGoodman]

That's probably beyond this board. You need some proper advice - whether it is a business or an investment is a tricky area; highly dependant on the facts and one that HMRC are alive to - there have been recent tribunal cases where (I believe) they have won.

[bd6759]

CGT probable on disposal of freehold to company.

SDLT payable on value of freehold to company.

SDLT payable by you on acquisition of leases.

CT payable by company on grant of leases.

IT payable by you if leases not granted at MV.

Do not rely on tax advice from a solicitor.

[Court123]

Thanks you again for all your comments.

Think I will take your advice and discuss with Tax consultant.

Kind regards

[AGoodman]

"Do not rely on tax advice from a solicitor."

*cough*

Maybe "do not rely on tax advice from a solicitor who doesn't specialise in tax".

[bd6759]

"Do not rely on tax advice from a solicitor."

*cough*

Maybe "do not rely on tax advice from a solicitor who doesn't specialise in tax".

Of course!!