My client has a growing portfolio of property. Currently stands at £600K (a new purchase going through to bring that up to £750K). The properties are mortgage free.
Although he has no other income he has considered transferring them to a limited company.
Question is if we were to transfer the portfolio to a limited company wholly in exchange for shares could we hold over the gain as part of incorporation relief?
Once the property is a limited company and trading for one year we are able to then place a floating charge over the portfolio (not exceeding 50%) and build his company's net wealth more easily.
Extraction of profit is of little concern as he requires no more income than £30k per annum (mortgage free property of £550K).
Based on transfer value's he will obviously be liable to SDLT
His aim is to manage a portfolio not simply provide an income and wind it down at retirement.