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Where Taxpayers and Advisers Meet

4 Property Transferred to Company Name

Nat2321302
Posts:7
Joined:Wed Nov 19, 2014 12:05 am
4 Property Transferred to Company Name

Postby Nat2321302 » Sun Feb 21, 2016 1:18 pm

Good Morning all,

I have this question - if 4 properties are transferred from personal name to a Limited company where the transfer is also the director and 100% shareholder in that company- then what are the tax implication for both the person and for the company at the point of transfer?

I understand that the person has to pay CGT. Does the company pay Stamp duty for the 4 property acquisition? Anything other tax or complication involved in this transaction ?

On the other hand if the company business activity is buying and selling property, can it deduct the stamp duty that it paid when it acquired the property and when can the company deduct this expenses?

Thanks

maths
Posts:8527
Joined:Wed Aug 06, 2008 3:25 pm

Re: 4 Property Transferred to Company Name

Postby maths » Mon Feb 22, 2016 4:03 pm

I assume the properties are let out. If so the question arises as to whether this constitutes a business or not.

If it is a business then incorporation relief would be available on a transfer to the company for CGT purposes.
If not, then gift relief might apply instead for CGT purposes.

SDLT is payable based on market values of the properties. This may include the additional 3% charge recently introduced (or even the 15% charge).

IHT not an issue.

GlobalTaxAdviser
Posts:633
Joined:Fri Dec 05, 2014 1:18 am

Re: 4 Property Transferred to Company Name

Postby GlobalTaxAdviser » Mon Feb 22, 2016 6:20 pm

Justifying four rental properties as a business is difficult unless it is your sole income and that most of your time goes into managing the rental properties.

There are other criteria to meet before it could be perceived as a business and is rare for landlords to claim incorporation or gift relief.

Kind Regards

GTA


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