Property ownership

Properties bought from LTD company funds LTD company name not on deed, intent was for company to own

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From tax point of view , as the intension was for the company to own the properties, hence where the funds came from, do the properties belong to the company.

Replies (39)

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By Tax Dragon
16th Apr 2022 15:26

Ask the solicitor.

How did such a mistake happen? Needs attention.

And you better hurry up as there may be consequences if you don't.

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Replying to Tax Dragon:
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By Bill Heard
16th Apr 2022 16:07

Can you expand on the consequences.
I have paid tax on all rental income as if they were in my own name.
I now feel that if the properties were as intended, I would be in a better financial position.

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Replying to Bill Heard:
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By Tax Dragon
16th Apr 2022 16:28

How so?

Anyroad, if you controlled the whole transaction, how come the outcome was not what you had intended? Did the solicitor make a mistake or no?

Did you pay tax on the money you took from the company? Did you take money from the company? It's getting confusing, this.

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Replying to Tax Dragon:
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By Bill Heard
16th Apr 2022 16:41

I assumed that because I own the company my signature on the deeds and where the monies came from would amount to the company ownership.
Yes all taxes have been paid.

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Replying to Bill Heard:
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By SXGuy
16th Apr 2022 17:16

So you never once had this convo with the solicitor and discussed the company owning the property?

I find it hard to believe that during the whole process it didn't come up once. You may have believed a director signature was enough but surely you would have at the very least enquired as to whether the company would own the property or not.

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Replying to SXGuy:
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By Bill Heard
16th Apr 2022 17:27

Over the years I have purchased 41 properties and have never been asked if purchased in the company name, and neither did I ask the question, I just made the assumption that as the money came out of the Ltd company, then the Ltd owned the property

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Replying to Bill Heard:
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By SXGuy
17th Apr 2022 08:20

41 properties and you never ever questioned who owns the property based on title deeds? Come on now.

It's not for the solicitor to ask you. They work under instruction. You tell them. I'm sorry but I just can not believe someone who's owned 41 properties would fail to check one minor detail.

The fact you received the rent personally on top of everything and didn't think to receive it via the company when you thought the company owned it, gives me serious doubts as to whether your being totally honest or making it up.

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Replying to SXGuy:
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By Paul Crowley
17th Apr 2022 20:29

I wonder if this really is a different question

Should I have planned differently?
Particularly as the solicitor is not being blamed for the "error"

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Replying to Bill Heard:
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By Mr_awol
19th Apr 2022 15:51

Bill Heard wrote:

I assumed that because I own the company my signature on the deeds and where the monies came from would amount to the company ownership.
Yes all taxes have been paid.

Did you also assume that because you own the company every cheque you wrote*, or credit card slip you signed*, reflected a company purchase?

* OK so these are out of date payment methods now, but you get the idea

Bill Heard wrote:

Over the years I have purchased 41 properties and have never been asked if purchased in the company name, and neither did I ask the question, I just made the assumption that as the money came out of the Ltd company, then the Ltd owned the property

Over how many years? You also say you have paid tax on them personally(?). If the intent was always to put them in the/a company why didnt you notice the first time you had to declare tax on the rent personally?

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By David Ex
16th Apr 2022 16:01

“LTD company name not on deed”

Bill Heard wrote:

do the properties belong to the company.

No.

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Replying to David Ex:
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By Tax Dragon
16th Apr 2022 16:07

Well, that's a legal matter on which neither you nor I should advise. But I see no reason to suppose that tax will do anything other than follow law here.

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Replying to Tax Dragon:
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By Paul Crowley
16th Apr 2022 17:03

Op claims that he has paid tax on the rent
So if company owned the properties, then wrong legal person declaring rent
A bit difficult now to change his opinion and blame the solicitor.
Fees, Stamp duty and letter of engagement must all be in the name of person so the error could have been identified way before completion.

But then we do not know how long ago this happened

OP does not say why he would be better off but I assume s455 tax has come to light and the BIK on interest

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Replying to Paul Crowley:
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By Bill Heard
16th Apr 2022 17:18

Where have I stated that I am looking to apportion blame on solicitor?
I am looking for the answer from a tax perspective as to intent

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Replying to Bill Heard:
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By Leywood
16th Apr 2022 17:42

What a mess you’ve made. Now to be compounded by asking for free advice, compounded yet further with provision of only partial facts.

I think you could be wrong about ‘all’ of the tax being paid.

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Replying to Bill Heard:
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By Paul Crowley
16th Apr 2022 18:43

How could solicitor know what your intent was?
This is a bit challenging to follow

Either solicitor made a mistake or you gave instructions that were faulty
Difficult to comprehend that the same error happened 41 times

Next question is
If the company has enough money to buy 41 properties, then you really ought to get personal advice from an expert in a 2 way conversation

This is not the forum for that conversation

He will probably need the accounts for the company and your tax returns from the first purchase onwards
Do the company accounts show that the company bought the properties, and also declared the rents?

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Replying to Paul Crowley:
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By Mr_awol
19th Apr 2022 15:46

To be fair, it doesnt read to me like the OP was looking to blame the solicitor (they were asked whether the solicitor made a mistake, but didnt raise that issue themselves.

It reads much more to me like the OP simply decided, after the event, that it would have been better to do it all differently and now wants to play let's pretend.

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By Jo Nokes
16th Apr 2022 17:53

Dear OP, I am wondering why you paid tax on the rents personally, if you thought the property was owned by the company. Where did the rents get banked? In the company bank account, or your personal one. The facts as presented are contradictory, which makes your request for advice difficult to respond to

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By DKB-Sheffield
16th Apr 2022 18:18

With a portfolio of 41 properties, or a portfolio that has contain 41 individual properties at some stage, I am certain you have an accountant/ tax advisor, and legal representative.

This is likely to be complex - already is - I suggest you approach said professionals, or seek a proper second opinion if you have, and take advice from there!

This is a mess, in more ways than we can hazard a guess at - tax and legal being a small part of the issue! You seem to have limited knowledge of 'corporate structure'!

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Replying to DKB-Sheffield:
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By Bill Heard
16th Apr 2022 19:36

Yes I have limited knowledge of the corporate structure, I can’t remember that being part of my apprenticeship when learning to put one on top of two.
Thanks for the advise

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Replying to Bill Heard:
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By DKB-Sheffield
16th Apr 2022 20:52

Bill Heard wrote:

Yes I have limited knowledge of the corporate structure, I can’t remember that being part of my apprenticeship when learning to put one on top of two.
Thanks for the advise

Bill,

You are of course correct. And stretcher bond wasn't covered in mine (you can laugh at my lack of knowledge). However, I wouldn't try building a house on advice from buildingweb. I assume you would advise me against doing the same (I'd actually get a professional in anyway).

You have too much at stake to take advice from here. The advice will be good (there are some brilliant contributors on this thread) but, if you don't know how to use the advice you could be doing more harm than good!

As you have suggested previously... because you signed the transfer deed (etc.), as director of a company, and that company paid the money, you'd assumed the property was owned the company... yet you (or, one would assume - your accountant/ tax advisor) has declared income on your personal tax return? Either we're not being told the full facts, you've missed telling us about some very important legal documentation, or something is seriously awry.

On a final, slightly unrelated point... have you considered the impact of IHT? A 41 property portfolio is quite a significant investment portfolio (personal or one-person limited) and one you should really get your tax advisor to look at planning for!

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By Jo Nokes
16th Apr 2022 19:06

Is this going to be another thread where the OP disappears and we never find out what kind of mess he has got himself into?

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Replying to Jo Nokes:
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By Bill Heard
16th Apr 2022 19:38

That will depend on whether you can answer the questions on intent from a tax perspective

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Replying to Bill Heard:
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By Tax Dragon
16th Apr 2022 19:49

You first need to explain why reality hasn't followed intent.

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Replying to Tax Dragon:
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By Bill Heard
16th Apr 2022 20:16

The reality is that I am now 68, still laying bricks 6 days a week, struggling to get appropriate Labour to assist.
So have been taking stock of my property portfolio and tax planning.
To add onto this my state pension and private pension. As I have stated I assumed that all my properties would be owned by the Ltd company.
Would I be correct in saying that all income in the company would be taxed separate to my personal income which would only be my pensions.

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Replying to Bill Heard:
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By Tax Dragon
16th Apr 2022 20:49

How long have you had this company? After all that time, only now do you ask that question?!

I'm out of this thread. As someone said already, what you say does not stack up. If you want to put things straight (it sounds like currently they are not - I mean really are not) then do as someone else suggested and get legal, tax and accounting advice. By which I mean advice that you pay for.

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Replying to Bill Heard:
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By David Ex
17th Apr 2022 00:10

Bill Heard wrote:

The reality is that I am now 68, still laying bricks 6 days a week, struggling to get appropriate Labour to assist.
So have been taking stock of my property portfolio and tax planning.
To add onto this my state pension and private pension. As I have stated I assumed that all my properties would be owned by the Ltd company.

41 buy to let properties even where I live is £4 million which with a conservative 5% yield is £200,000 pa. Not sure why with that plus state and private pension you’re brick laying but, hey, what do I know?

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Replying to David Ex:
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By SXGuy
17th Apr 2022 08:23

Im guessing it's not just me that can smell something fishy then.

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By Paul Crowley
16th Apr 2022 20:22

Ownership of property must evidenced in writing be in writing.
If your name not company name on all the documents then you probably have your answer

Intent is something in the mind
If not in writing then I suspect the intent is irrelevant

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Replying to Paul Crowley:
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By Bill Heard
16th Apr 2022 20:50

Thanks for your reply, looks like I will get hammered for tax even in retirement

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Replying to Bill Heard:
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By DKB-Sheffield
16th Apr 2022 20:57

Hindsight is great but... if you'd taken advice (proper advice), in the past, you would be getting 'less hammered' for tax in retirement.

If you did take advice, and that advice was wrong, you may have some recourse.

Take proper (paid for) expert advice now, and you may soften the blow!

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By Eighties Kid
16th Apr 2022 21:40

Why don’t you ask Prime Accounts?

Are you related to Amber?

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Replying to Eighties Kid:
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By Bill Heard
16th Apr 2022 22:03

Who is Amber
I did

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Replying to Bill Heard:
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By Eighties Kid
17th Apr 2022 17:16

Amber Heard is, among other things, a very good looking actress.

I would go back to the accountants and find out which properties comprise the £600k assets in the accounts. If you are not happy with the service provided by Prime Accounts, then engage a firm to meet your objectives, be they retirement planning, inheritance tax planning etc.

(Actually I would definitely look elsewhere as Prime Accounts can’t even get their own accounts in on time and have huge losses, how? Don’t take advice from this firm.)

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By Justin Bryant
17th Apr 2022 09:41

Apart from one or two people here, this forum is worse than useless at answering such questions, as you need a tax lawyer (who understands the law of equity and land law etc.), not an accountant.

My comments in the links below may point you in the right direction:
https://www.accountingweb.co.uk/any-answers/who-is-liable-to-the-tax
https://www.accountingweb.co.uk/any-answers/property-tax-who-pays-owner-...

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Replying to Justin Bryant:
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By The Dullard
17th Apr 2022 19:12

I agree. The OP needs to find a good lawyer. I wonder where they might find one?

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Replying to The Dullard:
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By memyself-eye
18th Apr 2022 10:51

He needs a 'brick-lawyer' (said in a Brummie accent)

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paddle steamer
By DJKL
19th Apr 2022 09:40

Were there are borrowings from banks when buying any of these properties ?

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Replying to DJKL:
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By Justin Bryant
19th Apr 2022 16:02

This recent case shows that the beneficial ownership of a property (or shares) legally owned by a company is not a straightforward matter under English law even when financed by a legally valid loan from another connected company.

https://www.bailii.org/ew/cases/EWCA/Civ/2021/1661.html

Bank borrowing can be done by a nominee on behalf of the beneficial owner (without the bank's knowledge of the nomineeship).

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By Justin Bryant
03rd May 2022 12:28

See paras 81 and 116 here for the law on sole legal ownership trust cases:
https://www.bailii.org/ew/cases/EWHC/Ch/2022/950.html

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