• Transfer To LTD And Buying A Residential Home After Transfer.

    By Guest on 27th Jul 2020

    I have a few questions in regards to transferring a property and buying a new as main residence property.

    I currently own a property valued between 360-400k, it has a consent to let, the rental income covers the mortgage.
    I am a high income tax payer, so my yearly tax is around 3-4k.


    I would like to transfer the property into a special purpose vehicle company, where I will be one of the director (possible with associate(s)) and had some questions: (I am aware that I would have to pay my current mortgage provider with exiting my mortgage too early.) The aim is to have a portfolio with multiple properties eventually.

    1. Would the company be liable to pay the 3% stamp duty on the evaluation price?
    2. Does the company need a deposit for the transfer(25%)? Can a house (on mortgage) from one of the associates be used as deposit/collateral?
    3. Do I (the seller) need to pay capital gains tax following transfer?

    On a separate note, which will impact on the decision to transfer.

    Me and the better half would like to buy a property as our main residence.

    At present, I am subject to 3% stamp duty as I already own the other property, however if the transfer of the first property is a success. Would I still be liable to the higher stamp duty, if I would buy a property as a main residence?

    best wishes

  • 1 Answers

    By NotaryExpress on 28/07/2020

    1. Yes
    2. No need for a deposit if you are gifting the property or transferring it by way of debt (money owed to you by the company for the property)
    3. Ask an accountant
    4. No, once you have transferred the property to your company you, as an individual, no longer own any second properties (unless you or your spouse own other property) so would be on the lower rate i.e. no SDLT if the purchase is under £500,000 under current rules.

    www.notaryexpress.co.uk

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