Stamp duty advice please!

Rockwood12

Stamp Duty advice needed!
PostTue May 02, 2017 9:53 pm

Hi,

We have three properties as follows:
Property 1: Owner A
Property 2: Owner B
Property 3: Joint owner A & B (unmarried). This was bought for a main residence, but work opportunity relocated us and now we are in rented elsewhere.
All three properties are rented.

We are looking at selling a property to fund a deposit for one in our new location, but ideally given conditions this should be property 1. As this has not been one of our main residences now for a number of years I guess we will have to pay the higher stamp duty?

Is there a way of setting up a company for the two remaining properties as I have read online that you then will not pay the higher stamp duty? Is this worth the effort/cost?

We are looking at around £350k for the new property - £7.5 vs £18k stamp duty.

Any advise on the above please?!

Thanks

sparky130a

Rockwood12 wrote: »

Is there a way of setting up a company for the two remaining properties as I have read online that you then will not pay the higher stamp duty? Is this worth the effort/cost?

Any advise on the above please?!

Thanks

No.

Yes. Pay the tax due.

DaftyDuck

Oh goody!!!

csgohan4

not another thread on, how to avoid Stamp duty, someone needs to sticky some threads

AdrianC

Rockwood12 wrote: »

We have three properties as follows:
Property 1: Owner A
Property 2: Owner B
Property 3: Joint owner A & B (unmarried). This was bought for a main residence, but work opportunity relocated us and now we are in rented elsewhere.
All three properties are rented.

We are looking at selling a property to fund a deposit for one in our new location, but ideally given conditions this should be property 1. As this has not been one of our main residences now for a number of years I guess we will have to pay the higher stamp duty?

Is there a way of setting up a company for the two remaining properties as I have read online that you then will not pay the higher stamp duty? Is this worth the effort/cost?

We are looking at around £350k for the new property - £7.5 vs £18k stamp duty.

Any advise on the above please?!

I presume A & B are looking to buy the new property jointly?
If so, then the ONLY way that they won't be paying the +3% is if all three of those properties are sold.

I rather suspect you'll find the initial costs of transferring all three properties into a corporate structure far outweigh the SDLT saving, even before you consider the extra ongoing costs and tax implications. Are any of the three properties mortgaged?

Victor_the_Gink

This is getting silly now. The board is getting clogged up by idiotic sdlt threads.

Selling the properties to a company would incur sdlt on that transaction, and CGT as they are investment properties, so is quite possibly the worst idea I've heard.

davidmcn

Rockwood12 wrote: »

Is there a way of setting up a company for the two remaining properties as I have read online that you then will not pay the higher stamp duty?

Please tell us where you read this.

AdrianC

davidmcn wrote: »

Please tell us where you read this.

He is right.

If the three properties were owned by a company, whose shares were owned by the two individuals, the two individuals would not pay the +3% SDLT, because they aren't the owners of the properties...

But that doesn't mean there wouldn't be a raft of other costs, taxes and charges associated with that corporate ownership, of course.

davidmcn

AdrianC wrote: »

He is right.

If the three properties were owned by a company, whose shares were owned by the two individuals, the two individuals would not pay the +3% SDLT, because they aren't the owners of the properties...

But that doesn't mean there wouldn't be a raft of other costs, taxes and charges associated with that corporate ownership, of course.

All true, I was meaning more that people keep on coming here with vague stories about stuff they've "read online", and without a link or quote it's difficult to tell whether it's some piece of considered legal/tax advice...or the Facebook equivalent of a bloke you've met down the pub who then goes on to tell you that pregnant women have the right to pee in a policeman's helmet.

AnotherJoe

Rockwood12 wrote: »

We are looking at selling a property to fund a deposit for one in our new location, but ideally given conditions this should be property 1. As this has not been one of our main residences now for a number of years I guess we will have to pay the higher stamp duty?

Correct

Rockwood12 wrote: »

Is there a way of setting up a company for the two remaining properties as I have read online that you then will not pay the higher stamp duty? Is this worth the effort/cost?

yes and no, in that order.

Are you making money on these properties? You might be better off selling all 3, providing a larger deposit and a better LTV giving lower mortgage rate, (and/or buying a better place) and buying another place as BTL later if you still aspire to be a LL.

lovinituk

*edit* deleting as it may be misleading