Higher land tax querie

Newheight13

I  have a residential and BTL property 2 x 200k which I’ve already paid the higher rate of stamp duty on. I want to keep my residential and change it to another BTL.

I understand I’ll have to pay higher rate of stamp duty on my next residential which would be a fortune. Is there any way I can transfer my current residential to a LTD as an additional BTL, pay the higher land tax on 200k, which then I’ll have no residential property - so can I then purchase a residential  at 400k with standard stamp duty costs?

I’ve also read that I can volunteer the higher rate on my current property to avoid paying it on  the next one that’ll cost more.

Thanks 

Keep_pedalling

Transferring your current home to a Ltd company would save you the additional SDLT, but your company would have to pay SDLT on the transfer.

Bookworm225

how will your company fund the purchase if there is currently an o/s mortgage on it ?
how much personal CGT do you think you'll pay on disposal of property into your company ? 
company will pay higher rate SDLT on its purchase

will the total of the above come to less than higher rate on 400k property?

SDLT_Geek

Newheight13 said:

I  have a residential and BTL property 2 x 200k which I’ve already paid the higher rate of stamp duty on. I want to keep my residential and change it to another BTL.

I understand I’ll have to pay higher rate of stamp duty on my next residential which would be a fortune. The extra SDLT would be 5% if the price of your next home, if you keep your existing home.

Is there any way I can transfer my current residential to a LTD as an additional BTL, pay the higher land tax on 200k, which then I’ll have no residential property - so can I then purchase a residential  at 400k with standard stamp duty costs?
Yes, but as others have said, the Ltd company would pay SDLT on its purchase.  That would be on the market value and with the 5% surcharge.  There would be other tax and practical implications.

I’ve also read that I can volunteer the higher rate on my current property to avoid paying it on  the next one that’ll cost more.
That is not right.  Though transferring the old home to a company will have something of this effect.

Thanks 

I am assuming that the next property you will buy is in England, so the relevant stamp duty is stamp duty land tax.  I have made comments above,

Newheight13

Thank you for your comments guys. I’ll be honest, I’m not sure I completely understand everything here.  In simple terms, if I transfer my current residential to a LTD at market value and incur the higher tax rate,  the and then purchase a residential, will the resi be at the standard rate? If so then that works out cheaper over on stamp duty, plus prevents me paying 40% tax so that works well if that simple. 

Thanks for replying on a sunny Saturday! 

Bookworm225

Newheight13 said:

If so then that works out cheaper over on stamp duty, plus prevents me paying 40% tax so that works well if that simple. 

no it is not that simple
as you don't understand the issues above then do a lot of research of your own so you do
once more: mortgage on BTL, CGT payable by you, SDLT payable by company 

anselld

Bookworm225 said:

Newheight13 said:

If so then that works out cheaper over on stamp duty, plus prevents me paying 40% tax so that works well if that simple. 

no it is not that simple
as you don't understand the issues above then do a lot of research of your own so you do
once more: mortgage on BTL, CGT payable by you, SDLT payable by company 

Why CGT?  The OP would be disposing their current residence to Ltd Co.

OP, has the proposed disposal property been your residence since purchase or has in been let for some period?