A client wants to transfer personally owned property in to a limited company as they are an employed higher rate taxpayer.
The client has been given an idea from others in the same situation that to be honest I don't think will fly. This being renting the property to the limited for a small rental fee. The limited then renting out the properties and taking the rental income and paying CT.
Any thoughts would be welcome and also any ideas on how to take rental income into a limited without paying stamp duty or CGT on the transfer of the properties.
Many thanks.
Replies (16)
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There are ways to mitigate the tax. But for one property, I can hardly see any benefit, if at all when taking into consideration the compliance costs.
Is there property borrowing?
Is there property borrowing to be considered?
Any change has to recover frictional costs, with SDLT, legals, tax et al it really has to be worthwhile, and of course assumes no future changes re property taxation; if residential properties I would be a little hesitant in assuming the future will be the past, they are still a very political topic and I would not be that surprised to see some changes in the next few years. (Property, like a puppy, is not just for Christmas)
Property management company charging the individual might be possible but depends on scale of activity as to whether this might have critical mass to be worthwhile.
So, in essence, is what the client wants something you ought to support or is the cure worse than the ailment?
This is
More the area of advice of a good tax lawyer than an accountant I think you'll find.
Or...
More the area of advice of a good tax lawyer than an accountant I think you'll find.
You might try a unicorn!
Do
More the area of advice of a good tax lawyer than an accountant I think you'll find.
you know one?
But then
If associated parties of the property,then there is no capital gain charge or loss, of a transfer of an asset from a sole trader to a company however, their may be a SDLT depending on the value of the property at market value.