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SDLT changes

Transfer of residential property to a limited company

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I have a client who owns a buy to let residential property worth £250K (there is no outstanding mortgage) which he wants to transfer to a limited company. If he makes this transfer before 31 March 2021 will the SDLT charge now be £7.5K (3% of £250K)?

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By Justin Bryant
09th Jul 2020 13:02

Yes. Go for it (you save £2.5k) ! He can have a nice DLA to draw tax free (and gear it up too with fully deductible interest relief). (The SDLT itself is deductible base cost for the company of course and the annual CGT exemption can be used on the sale.)

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By Paul Crowley
09th Jul 2020 14:18

How long does he intend to own property?
Has company exit been properly planned?
Taking rent out as dividends?

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By Adam12345
09th Jul 2020 14:44

What are your clients objectives? No mortgage would mean no s.24 benefit. There are other benefits, but that’s the main advantage.

I think whether it is a good idea or not would depend on your clients marginal rate of tax and the CGT due on transfer.

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