Transfer of current property into Ltd Company & buying a property as main residence

[Muten]

1. Do I need to pay high rate SDLT on my 2nd property (which would be £16800) if I transfer my current residential property to a LTD company (SDLT £9500) and buy 2nd home as my main residence.

2. Can I reclaim £16800 - £ 9500 = £6300 if I buy first buy 2nd property and pay £16800 and later on sell my 1st property to a LTD company ( with either me or my wife as director ) and pay £9500 SDLT on this sale. 

 

 

 

[Muten]

Can I sell my residential property to a LTD company of which my wife/ or I am a director and then call my self as a 1st time buyer and go on and buy another property?

Someone told me you will still be a 2nd time buyer and have to pay high rate SDLT. Can someone please confirm.

[Richlist]

I can't answer your question, I'd suggest you check with your tax office or an accountant.

However, I do have a few points:

* You haven't said what you intend to do with the property once held by the Ltd co.

* You will need to pay to form a Limited Company.

* If you are going to raise a Ltd co mortgage, be aware that interest rates are higher for a  Ltd co.

* The Ltd co will need to pay legal fees and SDLT when buying your property.

* The Ltd co will need to pay corporation tax on any rental income, in addition you will need to pay income tax on any money you take out other than dividends .

 

[Muten]

Thank you for the reply.

 

I have looked into all these costs and by moving to a LTD company I am saving approx 300 per month after paying corporation tax and others costs and will save SDLT on my 2nd property which is more than what I pay when I move the property to a LTD company.

 

So in all I will save approx £4000 on SDLT and 300 per month on rent..

 

But not sure if I have one BTL property in LTD company (of which I am a director) will i ve considered as a first time buyer if I go and buy a another residential property

[Richlist]

 

Seems all property purchase by Ltd co is subject to 3% sdlt surcharge.

[Muten]

My LTD company own one BTL property.

Now I want to buy a residential property in my and my wife's name... Do I need to pay high rate SDLT ?