Higher Rate Stamp Duty Question

Windofchange

SDLT_Geek wrote: »

No, this is not what I was hinting at. As Lover of Lycra says, it does not work to transfer a property into the "name of" a family member expecting to be transferred the property back.

Some people, especially where a let property has significant borrowings, look at the numbers for transferring the property to a limited company. On the plus side is the treatment of income, with a better ability to set off interest against rent. Also on the plus side is the fact that the individual no longer owns the property personally for the purposes of the 3% surcharge.

There are factors on the negative side, such as capital gains tax on the disposal and the cost of running the company. Another negative is that the company will pay higher rates of SDLT on the market value of the property. For a property worth £80,000 that would be £2,400.

It would doubtless take some time to arrange for the transfer to a company, so it sounds as if this might not be an option for OP.

Thanks for your considered responses. I have pretty much already come to the conclusion we are just going to stump up the money. It's a pain, a big pain, but what can you do. It's a bit of a messy one anyway to play around with due to family politics - the house was gifted a while back as a way to start building a retirement income / lump sum, and the rest I won't go into here.

Just means we aren't getting the new kitchen done month one, but I can live with that.