How to swap a company and a personal property?

How to transfer a personal property to company, and company property to personal at the same time?

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Hello all,

I asked my accountant and a conveyancer this question and got back opposing opinions, so I decided to ask it here and potentially hear other opinions.

My situation is the following: Together with my partner, I personally own a house without a mortgage. We own a second house, also without a mortgage, via a limited company with the intention to let it in the future. The two houses are identical in cost. We decided to slightly upgrade and buy a new house. The obvious option would be to sell our personal house, but for sentimental reasons, we would like to keep it. I was wondering if it is possible to swap our personal property and company property somehow so that our personal house will be owned by the limited company and the buy-to-let house becomes our personal house. This will allow us to sell the buy-to-let house as our personal and avoid paying Stamp Duty Tax on the new property. To my best understanding, when transferring the personal property to the limited company, we will still have to pay Stamp Duty Tax unless there is a legal exemption or some other way to swap the properties without any money exchange. I would appreciate any opinions on that, thank you.

Richard S

 

Replies (15)

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DougScott
By Dougscott
26th Apr 2024 17:28

So what were the opposing opinions?

My view is that you can not simply swap as the limited company is an entirely seperate legal entity to you. You'd have to sell your house to the limited company and the company would have to sell it's house to you - and each sale would result in stamp duty being payable and maybe CGT on the company property. However I am not a property lawyer.

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Replying to Dougscott:
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By User deleted
26th Apr 2024 17:42

Thank you. One option was, as you mentioned, to sell to the limited company, and then the limited company would sell to me. Stamp Duty will have to be paid.
The other was alluding to an exemption from Stamp Duty tax for transactions without exchanging money, and because the two properties have identical value I thought this might be an option.

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Replying to User deleted:
By Ruddles
26th Apr 2024 18:02

A perfect example of a little knowledge being a dangerous thing

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Replying to User deleted:
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By Paul Crowley
26th Apr 2024 19:37

How would the buy to let record the transactions?
Barter is for monies worth.

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Replying to User deleted:
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By FactChecker
26th Apr 2024 19:50

I presume your "One option" is what your accountant told you?
And the "alluding" one was from a conveyancer (that well known training ground for accounting and tax solutions)?

So you're not really seeking to resolve two differing opinions are you - just hoping that someone might back your conveyancer?
What do you think the chances of that are (and how long will your Accountant wish to retain you as a client if you don't believe the advice he/she gives you)?

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By Leywood
26th Apr 2024 17:32

if you want a second or third or fourth opinion you need to pay for it.

This is not a forum for tax advice for members of the public. Nor is it to robots legal advice to anyone.

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Replying to Leywood:
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By User deleted
26th Apr 2024 17:43

Hi, I'm happy to pay for an opinion, so let me know how you would like to proceed with this.

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By User deleted
26th Apr 2024 20:22

I already found what I needed and don’t need other opinions. Thank you to everyone for the input.

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Replying to User deleted:
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By FactChecker
26th Apr 2024 20:30

The concept of a forum is a place where people *share* things (might be problems, or suggestions, or interesting news, or just opinions) ...
... so do tell, what is it that you've found and how does it resolve your conundrum?

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Replying to User deleted:
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By More unearned luck
26th Apr 2024 20:55

"I already found what I needed and don’t need other opinions."

Nevertheless, I offer mine: the suggestion above that the company might have CGT to pay is wrong. The company will not have CGT to pay on its gain. So you don't have to worry about that tax on that part of the proposed swap.

Won't one of the properties become a swap to let?

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Replying to More unearned luck:
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By kaff
27th Apr 2024 10:49

But if the company later sells the house that was previously the principal private residence, the whole gain would crystallise on the company without the benefit of PPRR. Which may or may not make this a daft plan, depending on values. The potential loss of PPRR may outweigh any short term benefit of doing this.

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Replying to kaff:
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By Paul Crowley
27th Apr 2024 13:56

I think the comment is pointing out that companies do not pay CGT.

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Replying to Paul Crowley:
DougScott
By Dougscott
27th Apr 2024 17:03

Paul Crowley wrote:

I think the comment is pointing out that companies do not pay CGT.

Yes,of course I meant to say CT!

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Replying to Dougscott:
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By Paul Crowley
27th Apr 2024 17:32

Everybody knew what you meant, but the occasional jape is needed from time to time

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Replying to kaff:
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By gillybean04
27th Apr 2024 19:47

What would the 'whole gain' be? At what base cost would the company acquire it?

Additionally what does the extra P in PPRR stand for?

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