New government policy: Will buy-to-let investors lose out?

Pennywise

chucky wrote: »

here's another question that sounds very interesting...

if you have a Ltd Co and that Ltd Co owns a property or a number of properties.
when you go to sell the properties why don't you sell the Ltd Co - that way the buyer doesn't pay Stamp Duty for the properties. therefore you can negotiate an increased return.

is that correct?

Far too simplistic I'm afraid. If you buy a limited company, you don't have a "clean break" away from whatever "nasties" may be lurking in the company, such as unknown liabilities, potential to have to deal with tax enquiries and be liable for unpaid tax & penalties etc for periods before your ownership, etc. You need to have a "due diligence" review undertaken by accountant/solicitor specialists which can cost thousands - a kind of "audit" to give you comfort that nothing untoward is hidden in the company, and that the company does indeed have the legal ownership of the properties, and then you need a long legal document to be drawn up to make the seller liable for anything they havn't disclosed. You also have to factor in the in-built tax liability of the capital gains accrued to date on the properties within the company - the buyer is buying the shares - if the company sells a property, it's still liable to tax on the "gain" between its purchase and selling price. Also, what about the borrowings - the bank may not agree to continue the loan/mortgage/overdraft facilities if there's a change in ownership of the company. Unless the company is huge with many properties, it's just not worth the buyer wanting to go through all the hassle and cost, and taking the higher risk, just to save a bit of stamp duty. All the "benefit" is on the seller, so the buyer will want a hefty discount, so your idea of the "increased return" just wouldn't work unless the buyer was an idiot who didn't realise what he was getting into and so short sighted that he put the stamp duty saving above all the potential liabilities he was signing up for.