Stamp Duty Premium on BTL through Ltd Company with 2/4 directors who do not own a home...

solidpro

Hi

As I understand it, my wife and I own and live in our principle private residence and we own more property through a Ltd company that owns real estate. As a consequence we pay the '2nd home' premium on stamp duty of each and every home that company buys.

However we have considered setting up another Ltd company which would buy, renovate and sell property with 2 others who do not own any property. We considered setting up a new Ltd company with 4 equal owners/directors, each owning 25% shares and investing the same amounts. However, would that company be liable for the '2nd property' stamp duty premium bearing in mind 50% of the owners don't own a house?

What if it was 51/49 with 51% not owning a principle private home?

Thanks

SDLT_Geek

solidpro said:

Hi

As I understand it, my wife and I own and live in our principle private residence and we own more property through a Ltd company that owns real estate. As a consequence we pay the '2nd home' premium on stamp duty of each and every home that company buys.

However we have considered setting up another Ltd company which would buy, renovate and sell property with 2 others who do not own any property. We considered setting up a new Ltd company with 4 equal owners/directors, each owning 25% shares and investing the same amounts. However, would that company be liable for the '2nd property' stamp duty premium bearing in mind 50% of the owners don't own a house?

What if it was 51/49 with 51% not owning a principle private home?

Thanks

The property would be in England, so the relevant stamp duty is stamp duty land tax?

If so the extra 3% SDLT will be payable on a purchase by the company on any dwelling it buys, regardless of whether the company, its shareholders or its directors have other property interests.

If buying for over £500,000 there are some extra traps to look out for.

tacpot12

As per SDLT_Geek's post, if it is a company that is buying the property they have to pay the higher rates of SDLT. There is no possiblity of an exemption if the company is the purchaser. 

solidpro

So essentially, any Ltd company in England buying residential property always pays the extra 3%?

user1977

solidpro said:

So essentially, any Ltd company in England buying residential property always pays the extra 3%?

Yes - it's all explained here:

https://www.gov.uk/stamp-duty-land-tax/residential-property-rates