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Gifting a commerical property into ltd co.

Gifting a commerical property into ltd co.


I have a client who's father-in-law is going to gift a commerical property into a new limited company. Shares will be issued to client and father-in-law. Commerical property will be rented out to 3rd party.

The property plus all costs associated with the transfer of the property into the new company will be treated as capital, but I am not sure of the base value of the property.

I could:

a) transfer property in at zero value and then revalue at a later date

b) transfer in at current market value

If anyone could confirm how they would do it in this situation and whether there are any other considerations I have missed I would be grateful.

Thank you



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By Ruddles
17th Jul 2017 15:07

Is the property being gifted, or is it being transferred in return for an issue of shares?

As for any other considerations, there could be a host of them - SDLT/LBTT, VAT, CGT, IHT ...

Thanks (1)
By nrw
17th Jul 2017 12:58

Given that you will need to pay SDLT based on current market value, you might as well go for b)?

Edit: Assuming it's above the £250k threshold...

Thanks (1)
17th Jul 2017 18:25

Client has confirmed property will be gifted and father-in-law will not be issued any shares in return for the property.

Thanks for your comments on this and for confirmation of potential CGT, IHT, SDLT etc implications.

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