Can I sell my house to my company?

welshnoonoo

Is the person advising you thinking of you using property as part of your company pension?

If so, I have heard of people doing that before, but I was told it could only be done commercial property though I do not know that this is categorically the case.

sdooley

The only reason for having the home you live in in a company I have heard of is if you are a non-UK person, using an offshore mortgage to get round remittance rules. But I thought that had been got rid of in the last budget.

I can't think how this would save you money and it could well increase your tax bill significantly (you living in the home would be a taxable benefit for a start).

poppysarah

You are considered SE until you've got something like 4 years books for company - so you won't get the money lent you.

You might have to ask professional advice from an accountant about the tax issues too.

truman_sparks

mostly done in property development so that it can be re mortgaged and cash released for the next project.

dont see the gain and has risks.

Rabiddog_2

Supposing the OP wasn't living in the property, it was let out? but he intended to buy it back, many years later and live in it for his PPI. Does it have to be sold at market rate each time?

chewmylegoff

Rabiddog wrote: »

Supposing the OP wasn't living in the property, it was let out? but he intended to buy it back, many years later and live in it for his PPI. Does it have to be sold at market rate each time?

you don't have to actually sell it at market value - you can transfer assets at not market value.

however, you have to pay tax on it as if it was transferred at market value.

thus, if your house is worth £100,000 and you use your company to buy it off you at £200,000, you will be assessed for tax (probably income tax + NI) on the extra £100,000.

likewise if you transferred a house to yourself from a company for £0 then (i) the company will be taxed as if it had sold the house at market value and (ii) you would be taxed as if you had received income from the company (i think it would be treated as a dividend in specie).

edit: pretty sure each transfer would also attract stamp duty, if the market value of the property fell above the threshold.

not in response to your post, but a further point, any bank is going to be suspicious of the OP's intentions. it may look to them as though he is trying to put responsibility for the mortgage behind the corporate veil, in order to escape personal liability for the debt. i think the bank would require a personal guarantee to lend in this scenario.

Richard_Webster

Too late now but I did have a client who sold a house that was let (or intended for letting) to their company at a market price just before the end of the last tax year in order to realise the capital gain and get taxed under the CGT rules then applicable.

chewmylegoff

Richard_Webster wrote: »

Too late now but I did have a client who sold a house that was let (or intended for letting) to their company at a market price just before the end of the last tax year in order to realise the capital gain and get taxed under the CGT rules then applicable.

surely that was a lunatic decision as the effective rate was lowered from 24% with full taper for non-business assets (and i'm pretty sure that buy to let properties were not eligible to be classed as business assets) to 18% flat rate under the new tax rules.

was it a furnished holiday let or something?

Rick62

Can't see any possible tax advantages if it is your PPR, as your PPR there is no tax on it already - how can you get better than that?

You would not be able to transfer your mortgage, you would have to repay it, maybe incurring penalties and then no one else would want to lend.

Richard_Webster

surely that was a lunatic decision as the effective rate was lowered from 24% with full taper for non-business assets (and i'm pretty sure that buy to let properties were not eligible to be classed as business assets) to 18% flat rate under the new tax rules.

They went into it and decided it was to their advantage having spoken to their accountant. I didn't advise as to the wisdom or otherwise of the transaction!