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Gifting Flat to Ltd

Gifting primary residence to Ltd if planning to move out

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Hello Everybody,

I own a flat which is my primary residence and has appreciated substantially since I bought it, 250k to 450k. I am now planning to move out to my partner's property and I am considering if it would be tax-efficient gifting the property to my Ltd to crystalise my CG while I have the exemption. I would end up paying SDLT but I fear the government might increase CGT in the near future.


Replies (8)

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By jcace
06th Dec 2020 13:26

You need to assess your plans for the property, short and long term, then estimate the likely impact in terms of taxes and other costs from making such a transfer. Consider also any borrowing you have against the property.
Might be worth your while to have a meeting with a professional who can help consider all angles and take into account your particular circumstances.

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By Paul Crowley
06th Dec 2020 13:34

Why gift?

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Replying to Paul Crowley:
paddle steamer
06th Dec 2020 13:58

Agreed, if one were to think placing a residential property in a limited was a good idea , presumably to rent out, creating a large CR balance directors loan account might be very useful re future post corporation tax profit extraction.

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By Jane Evans
06th Dec 2020 15:10

Gifts to companies are not a good idea. You would likely cause an IHT liability. Time to get some professional advice.

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Replying to Jane Evans:
By Justin Bryant
06th Dec 2020 16:28

Assuming gift is to his 100% company there would be no loss to estate and so no IHT. CT would be the concern if not treated as a tax free capital contribution.

He is barking up the right tree and this is potentially good pre Budget 2021 planning if done as a sale (only 3% SDLT) and if gains were small.

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By pn
06th Dec 2020 19:38

Transferring a property to a company is good idea for sheltering higher rate taxes but has the impact to double taxation being considered if the property is sold and profits are extracted?
Basic rate dividend tax is currently 7½% and and do not be surprised if this is increased to employee or employer national insurance rate in the next budget.

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Replying to pn:
By frankfx
06th Dec 2020 22:30

Do not overlook ATED
£500,000 threshold on the horizon.

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By Tax Dragon
07th Dec 2020 07:25

How much would it cost you to engage an accountant or tax advisor? (Less than the SDLT you are already accepting as a cost.)

How much could it cost you to make the wrong choice? (More than the SDLT aforesaid.)

The first reply therefore provided the best advice you'll get from t'internet, to your question as framed.

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