Certain lawyer and tax advisers are advocating those with sizable property portfolios transfer their property "business" to an LLP.
By transferring the benefical interest to the LLP they will avoid SDLT and Capital Gains Tax. The mortgages and legal ownership will remain with the individuals. In three years time the LLP will transfer the properties to Limited company and reduce inheritance tax (plus other tax advantages). Though looks like the government is about to put to an end to this major tax benefit of Family Investment Companies and therefore any inheritance tax gains maybe lost.
Would the transfer to LLP come under GAAR as just seems too good to be true ? I am seeing a lot of landlords who are signing up for such schemes who ultimately may end up with large tax bills if the government plugs this loophole.