Looking for clarification on this as getting conflicting advice via another accountant and solicitor. I have simplified the details below.
Company A owns 2 properties (on a single title though so in theory single property?)
Company A wants to "sell" properties to person A to remove them from company A and into personal name for various reasons
Person A is also sole shareholder and Director of Company A
Properties combined value £200K but individually £100K each and therefore under SDLT threshold.
Is stamp duty payable on this transaction if property split onto two separate titles and then conveyed out of company into individuals names as two separate properties?
If the answer is yes as linked transactionthen if this is carried out one property at a time, potentially with a gap of many months or even years, does the same issue occur?
Replies (18)
Please login or register to join the discussion.
Consideration?
What is the frigging consideration? Is any debt being assumed by A? Is A actually paying anything?
If there is not any consideration then there is not any SDLT.
If there is consideration then they are linked transactions (however you structure it), but then you do not go on to bloody well say whether or not they are residential dwellings (which would negate the effect, at least to some extent, in any event) either.
You have written five paragraphs more than the average OP bothers to write, but you have still omitted vital information.
This is why Portia gets cross.
There is no market value
Market value generally only applies when a person transfers an interest in land to a limited company with which they are connected, but not the other way round.
The loan account being repaid is the consideration for SDLT purposes.
They are linked transactions, but you will get multiple dwellings relief, meaning that the rate of tax is determined by the average value of the two properties.
There are non SDLT considerations, such as a deemed MV sale (or CGT disposal if they have already been appropriated to fixed assets) in the company, and a dividend in specie or employment income charge to the extent that market value exceeds the amount of loan that is being repaid.
There is also a deemed supply for VAT purposes, which will be exempt, and may have implications if any input VAT was ever claimed on the refurbishment.
Does it matter here or is it a question for future transactions
Ok that's all clear then, I guess only outstanding is what makes them linked? For example if one property is transferred out tomorrow and the other is left in the company and continues to be marketed for sale. Then if no sale is achieved in 2 months, 6 months etc so it is decided to transfer it out so available for rental, then is that still linked?
Surely given the figures, and the average for this particular transaction, linked/unlinked makes no difference as no SDLT payable if the average is £100,000 and they are each residential. Or am I missing something?
They would still be
A series of transactions between the same vendor and purchaser. That is what makes them linked.
"They are linked transactions
"They are linked transactions, but you will get multiple dwellings relief, meaning that the rate of tax is determined by the average value of the two properties" subject to the rate being a minimum of 1%. Not sure multiple dwelling relief is of any use here.
Very clever
"They are linked transactions, but you will get multiple dwellings relief, meaning that the rate of tax is determined by the average value of the two properties" subject to the rate being a minimum of 1%. Not sure multiple dwelling relief is of any use here.
Since we still have not been told what the actual consideration is. Perhaps the loan is £500,000 and the individual is accepting the properties in satisfaction of the loan?
Very true. Still, the minimum rate possible using multiple dwelling relief is 1% but maybe if the individual is paying a seriously inflated price then it may prove useful.
Thanks, now understand
"They are linked transactions, but you will get multiple dwellings relief, meaning that the rate of tax is determined by the average value of the two properties" subject to the rate being a minimum of 1%. Not sure multiple dwelling relief is of any use here.
Thanks, was not aware minimum rate of 1% if linked, even if individual sales would be at 0%.(We tend to leave SDLT matters to our solicitors)
Yes
I do agree that the minimum rate if MDR is claimed is 1%. I had ignored the actual values offered, since they were not relevant.
Minimum rate of 1% if applying multiple dwelling relief. Not minimum of 1% if linked. What if the consideration was £62,499 each?
Sorry
Minimum rate of 1% if applying multiple dwelling relief. Not minimum of 1% if linked. What if the consideration was £62,499 each?
Thanks, what I think I intended to say ,but didn't. SDLT is really not for me.
Location, location, location
SDLT is really not for me.
It very soon will not be an issue you will need to consider regularly, if I have your location correct.
Land and Buildings transaction Tax
SDLT is really not for me.
It very soon will not be an issue you will need to consider regularly, if I have your location correct.
You are correct; unless I move South, I am still reserving judgement until the Smith Commission outcome is clearer.