Set up limited company - transfer buy to let. New purchase subject to stamp?

CDB199

Current residence I am looking to let out long term. Then looking to purchase a new residential property to develop and live in.
Clearly as a second property I will be subject to stamp duty at he new high level.

Have been told about the benefits of setting up a limited company for tax. Question though, as I am transferring the property to the limited company, will I still have to pay new stamp duty levels?

If so, are there any good ways or loopholes one can look into to not pay the new hefty stamp duty? Any good reading on this and the benefits of setting up limited company.

For reference, my current home is mortgage free. Looking to release equity, down the let to buy route. Any advice the forum can give me would be great.

anselld

"Using a property company to save tax" by Carl Bayley. Make sure you get the 2018 edition.

However, it will explain that there is no easy or tax-free way to transfer an existing property into a Company. If you transfer your current property into a Company you (the Company) will immediately pay SDLT at the higher rate on the full market value. Fair enough you would then only pay normal SDLT on your new residence.

There are tax advantages of the Ltd Co, particularly for higher rate tax payers under the new mortgage regime, but there remains the problem of getting the property into the Co in the first place.

Hence the benefits are for those who either plan in advance or who are prepared to take the hit in the short term (and then the rules might change before the benefits accrue anyway).

CDB199

Any useful reading to investigate what one can do to not pay the second home stamp duty? (Other than sell initial property)

00ec25

CDB199 wrote: »

Any useful reading to investigate what one can do to not pay the second home stamp duty? (Other than sell initial property)

yes, sell the first property and claim a refund if the first property was your home and you do the sale within the allowed time limits

other than that no, you can't avoid the second home SDLT since it was expressly designed to apply to those who buy ...err ... additional properties.

https://www.gov.uk/hmrc-internal-manuals/stamp-duty-land-tax-manual/sdltm09730

Hence such an obvious loophole as using a company was also closed off.
https://www.gov.uk/hmrc-internal-manuals/stamp-duty-land-tax-manual/sdltm09835

anselld

CDB199 wrote: »

Any useful reading to investigate what one can do to not pay the second home stamp duty? (Other than sell initial property)

Buy a commercial or mixed use property and convert it.

CDB199

Do the real advantages of registering and going down the limited company route kick in with subsequent properties then?

As to me doing the maths, I’d save a little tax doing it, yet lose this on higher mortgage rates on the current property that I am releasing equity on (via let to buy)