Gifted Property to LTD Co SDLT/CGT to Pay?

Gifting a Property to LTD Co

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I have an Unencumbered property owned jointly between my wife and I.  Its current market value is around £250K.

 My plan is to gift this property to my LTD Co, Wife and I are directors my question is:

Is there a SDLT trigger?

Would I pay CGT at Market Value?

Thanks in advance

Mark

Replies (5)

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Portia profile image
By Portia Nina Levin
11th Jan 2017 19:00

Yes and Yes. The SDLT is around £10,000. Any capital gain is potentially taxable at 28%. The combined rate (company and personal) of tax on the income is potentially 46%/56% (compared with 40%/45% if you do keep it personally).

Is there any reason for your seemingly random plan?

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Replying to Portia Nina Levin:
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By HMOLandlord
11th Jan 2017 19:12

Thank you for your reply.

I have portfolio which I intend to gradually move from out individual names via LLP to LTDco due to introduction of S24.

I did read here https://www.gov.uk/guidance/sdlt-transferring-ownership-of-land-or-property "If the transfer is a gift and there’s no consideration, SDLT doesn’t normally apply"

So i was hoping there would be no SDLT trigger but would be happy to pay CGT as there is only a small gain

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Replying to HMOLandlord:
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By Portia Nina Levin
12th Jan 2017 10:45

The one exception to the "doesn't normally apply" is where the donee is a company connected with the donor. FA 2003, section 53 deems the consideration to take place at market value.

The rules on transfers out of a partnership will override that, but you are a complete mug for not taking advice. You are likely to fall foul of the SDLT anti-avoidance provisions and you are already looking at a CGT liability that does not need to be crystallised.

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By MBK
12th Jan 2017 13:33

Whatever you do, do not believe anybody who tells you that it is possible to avoid SDLT (or CGT for that matter) by firstly transferring your personally owned properties to an LLP and then on to a limited company. IT DOES NOT WORK!! Putting an LLP in between cannot make a difference.

They'll take fat fees off you for the privilege and will be nowhere to be seen when the whotsit hits the fan.

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Replying to MBK:
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By Portia Nina Levin
12th Jan 2017 13:45

I think the OP is planning a DIY job.

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