So a client bought a new house to live in but "couldn't" sell his flat (well only at a substantial loss) and thus paid the extra 3% SDLT. He rented the flat hoping value would come back up and then planned to sell within the time limit to reclaim the 3% extra stamp duty paid. Unfortunately covid has scuppered plans (people don't want city centre flats) and he still can't sell (flat was marketed empty for several months) and now time is running out to reclaim the 3%. I am aware that HMRC may consider extensions but that's a bit too vague and as property is rented I'm not sure he'd get the outcome he wants.
So my question is can he sell to his own Limited Company and thus claim the refund or is there any connected party anti-avoidance (I can't see any). I know the company will still pay the 3% SDLT but the net difference is still significant as he now has a family house compared to his old batchelor pad.
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Client can sell the dwelling to the Limited, the Limited is not the same as the person, so the individual would be able to reclaim their 3% surcharge relating to the purchase of the family home....but they'd have to pay 3% surcharge on the apartment going into the company.
The sale of the dwelling into a Limited company would be at market value and then SDLT at 3%.
You've provided no figures in your question, so also consider if ATED applies, cost of annual accounts/filing, plus the CGT liabilities of holding property in a company.
Why does he have to give it to someone friendly? Why can't they be unfriendly? Or were you suggesting tax evasion?
Where've you been, Dulls? Justin doesn't see it as evasion*.
There was a spate of gift-and-gift-back questions near on a year back. Although Justin did concede that the gifts might be consideration, the one for the other, and you could end up with SDLT all over the place, he maintains that a transfer is a gift if it's not enforceable by the transferee**. He may be right in law - IANAL - but, for tax purposes, I'm not convinced that matters.
*And he may be right - if your actions mean you pay more SDLT than you 'evade', have you 'evaded'?
**See closing line of his OP here: https://www.accountingweb.co.uk/any-answers/that-recent-sdlt-gift-gift-b...