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Where Taxpayers and Advisers Meet

Is there CGT on transferring company funds from LTD to LLP restructure?

betax
Posts:3
Joined:Thu Feb 25, 2021 4:02 pm
Is there CGT on transferring company funds from LTD to LLP restructure?

Postby betax » Thu Feb 25, 2021 4:41 pm

Hi All,

I have been advised that using an LLP company is more beneficial to me then using my LTD company.

Can you tell me the tax implications of setting up an LLP and transferring all my LTD company accounts to the LLP?

I have company loans and accounts in my LTD so can I create an LLP and transfer the funds from my LTD to a newly created LLP providing I let the loan company know, without having to pay any tax on transferring the funds?

Many thanks in advance

bd6759
Posts:4262
Joined:Sat Feb 01, 2014 3:26 pm

Re: Is there CGT on transferring company funds from LTD to LLP restructure?

Postby bd6759 » Thu Feb 25, 2021 5:18 pm

Maybe the person who suggested it would be beneficial to have an LLP could explain to you their reasoning and exit plan?

betax
Posts:3
Joined:Thu Feb 25, 2021 4:02 pm

Re: Is there CGT on transferring company funds from LTD to LLP restructure?

Postby betax » Thu Feb 25, 2021 5:44 pm

@bd6759

The reason this was suggested was to use an LLP as a holding company and use an LTD to control SPV's.

I have no accountancy experience at all so my terminology may be incorrect and my understanding of what is suggested. This is why I am using this forum as a second opinion. Is this OK to do as your previous reply was not very helpful?

bd6759
Posts:4262
Joined:Sat Feb 01, 2014 3:26 pm

Re: Is there CGT on transferring company funds from LTD to LLP restructure?

Postby bd6759 » Thu Feb 25, 2021 8:00 pm

Sure tax implications follow the facts. So we need to know exactly what is is you plant to do, and how you plan to do it.

Making an LLP the holding entity of a group makes little commercial sense.

The person who gave you this advise must have an idea in mind as to how it is to be done. That is the person you need to get advice from. You cannot get a second opinion without explaining the first opinion.

betax
Posts:3
Joined:Thu Feb 25, 2021 4:02 pm

Re: Is there CGT on transferring company funds from LTD to LLP restructure?

Postby betax » Sun Feb 28, 2021 11:43 pm

Hi bd6759,

So let me explain.

I have a digital marketing Limited company but will be changing the structure of my work to more specific lead generation for certain industries.

So the advice I need is whether to and whether I can, change my LTD to an LLP with a partner and then I can structure an LTD from the LLP as I would possibly be running numerous LTD companies for each industry?

My funds are in my LTD so if that was then changed to an LLP, can I then transfer my funds to the newly formed LTD without any tax implications? Not even a loan, just a straight transfer of funds?

I hope this makes sense to you and if you can share some advice, then thank you.

Incredulum
Posts:2795
Joined:Thu Dec 03, 2009 5:35 pm

Re: Is there CGT on transferring company funds from LTD to LLP restructure?

Postby Incredulum » Mon Mar 08, 2021 8:50 pm

Struggling to work out exactly what you're trying to achieve here, or why.

I presume this is being driven for commercial reasons, rather than tax. And that you are looking to enter into a joint venture with somebody else - hence the partnership?

1. What are the reserves of your Limited Company?
2. Have you thought about making your Company a partner in the LLP. That way you get the tax benefits of running a limited company, whilst still being able to enter into a partnership with this other person.

I don't see why you need large numbers of limited companies for each industry. One company can do many different things.


However, you seem pretty confused and I agree with bd6759 that you should go back to the person who suggested the idea and get them to explain it properly.


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