Best way to transfer a private property ownership to my ltd company?

solidpro

Hi

I currently own a Ltd company which owns various homes, rented. I currently live in a £400k home, fully paid off.

I want to go and buy a new house to live in elsewhere, but the home I already own and live in is an ideal rental. So I would prefer it to be owned by my ltd company to rent out. What would be the most tax-efficient way to transfer the ownership of my current home to the company?

Has anyone ever done this? Obviously there is a stamp duty overhead on any 2nd+ property, you'd want to try and manage - I guess the Ltd company would always be paying that anyway, so I'd just have to suck it up and will always get 'back' my first home stamp duty when I buy privately again?

I seem to remember being told there is some kind of 3 month gap where to sell your own house to your own company, you mustn't be living there for 3 months?

Cheers

SDLT_Geek

solidpro said:

Hi

I currently own a Ltd company which owns various homes, rented. I currently live in a £400k home, fully paid off.

I want to go and buy a new house to live in elsewhere, but the home I already own and live in is an ideal rental. So I would prefer it to be owned by my ltd company to rent out. What would be the most tax-efficient way to transfer the ownership of my current home to the company?

Has anyone ever done this? Obviously there is a stamp duty overhead on any 2nd+ property, you'd want to try and manage - I guess the Ltd company would always be paying that anyway, so I'd just have to suck it up and will always get 'back' my first home stamp duty when I buy privately again?

I seem to remember being told there is some kind of 3 month gap where to sell your own house to your own company, you mustn't be living there for 3 months?

Cheers

If the house is in England, then yes, the company would pay stamp duty land tax on the market value of the property with the extra 3% surcharge.

Yes, a subsequent personal purchase by you should escape the 3% surcharge.

The three month period you mention does not ring a bell with me.

solidpro

SDLT_Geek said:

If the house is in England, then yes, the company would pay stamp duty land tax on the market value of the property with the extra 3% surcharge.

Yes, a subsequent personal purchase by you should escape the 3% surcharge.

The three month period you mention does not ring a bell with me.

Hmmm - maybe it was to do with a condition of a loan on a property at the time.... Or maybe it was to do with tax rules - you can't 'benefit' from the assets of your company without paying taxes on it - as in, I can't sell it to the company and then live there rent free - or for rent lower than market rate...?

How does one reach a value, or who would want to know how you valued the house? Can you get 3 quotes and use the lowest?

Thank you!

GDB2222

On the contrary, you might want the highest value, thinking about taxes other than SDLT.

CKhalvashi

solidpro said:

SDLT_Geek said:

If the house is in England, then yes, the company would pay stamp duty land tax on the market value of the property with the extra 3% surcharge.

Yes, a subsequent personal purchase by you should escape the 3% surcharge.

The three month period you mention does not ring a bell with me.

Hmmm - maybe it was to do with a condition of a loan on a property at the time.... Or maybe it was to do with tax rules - you can't 'benefit' from the assets of your company without paying taxes on it - as in, I can't sell it to the company and then live there rent free - or for rent lower than market rate...?

How does one reach a value, or who would want to know how you valued the house? Can you get 3 quotes and use the lowest?

Thank you!

You get 3 quotes and use the average to ensure no nudges and winks, ensuring this is roughly the same as any similar properties recently sold in the same area.

I'm not sure why you'd want to use the lowest as any additional stamp duty now will dwarf any potential corporation tax bill later on when the property goes on to be sold.

theartfullodger

HMRC are entitled to use market price for sdlt if they think people are on the fiddle.

And where will company get the money to pay you?

solidpro

theartfullodger said:

HMRC are entitled to use market price for sdlt if they think people are on the fiddle.

And where will company get the money to pay you?

It has it.