Transfer home from LLP to personal names

Gavcat

Last year my wife and I set up a Limited Liability Partnership in Scotland which we used to purchase a house as an investment to let out. However, as we were renovating it, we made the decision to sell our existing home and make it our new home. We are now in the situation where our home is in the name of the LLP which is dormant, and we want to change the ownership to our personal names. Is it possible to do this through a transfer in specie, or if not, what is the easiest way to do this?

davidmcn

You decide what price you want to sell/buy the property for, and register a Disposition by the LLP to you as individuals. No mortgages involved for seller or buyers, I presume?

Gavcat

Thanks David, There are no mortgages involved. Do we have to get this done through a solicitor or can it be done by ourselves?

theartfullodger

CGT????

Careful with that price.  Thought HMRC have powers over price for a variety of reasons

Gavcat

It's our primary residence and will remain so, so I don't see why CGT would come into it. I was planning on taking the valuation from a Zoopla estimate, which will be roughly what we spent on renovating it.

unforeseen

Can you actually transfer from the dormant LLP without making it live? 
I know that is the case with limited cos., I don't see LLPs as any different

davidmcn

Gavcat said:

Do we have to get this done through a solicitor or can it be done by ourselves?

You can do it yourself. You'll need to figure out drafting the Disposition yourself (not that tricky for something already in the Land Register), and how to complete the registration form. Also get through the Land Register's ID requirements.

SDLT_Geek

I know for Stamp Duty Land Tax the partnership rules are complicated.  I am not sure what the position is for Land and Buildings Transaction Tax.

theartfullodger

If price had been low for whatever reason then when in years to come on selling, if no longer your home or CGT rules changed you might have ended up paying more than you would if price was realistic, which you seem to be planning (on a realistic price)

Gavcat

SDLT_Geek said:

I know for Stamp Duty Land Tax the partnership rules are complicated.  I am not sure what the position is for Land and Buildings Transaction Tax.

The reason I want to do it now is because of the increase in LBTT exemption limit, as when we initially bought it, the value was below the limit, but now it would be above the normal limit, but not the raised limit, so hopefully it won't come into it. We got screwed enough on the second home LBTT which we initially paid when purchased through the LLP, (as although this was the first property purchased in the LLP, the fact we owned our home in our own names meant it was classed as a 2nd property) but when we sold our previous home in our own names, we were not allowed to claim it back as it was a different entity apparently. That still hurts!

Keep_pedalling

Gavcat said:

It's our primary residence and will remain so, so I don't see why CGT would come into it. I was planning on taking the valuation from a Zoopla estimate, which will be roughly what we spent on renovating it.

You may be in residence but you are not the owners, so any gain in value will be subject to corporation tax on disposal. A transfer in specie is possible but that seems to  leave you liable to dividend tax. 

https://www.limelight-accountancy.co.uk/blog/transferring-properties-to-directors-from-limited-company-tax-efficiently

You really need to speak to an accountant.