3% SDLT on Ltd buying a residential

[fellatthefirst]

Hi

I am wondering if anyone on here can clear this up.

If a limited company buys a residential property does it have to pay the extra 3% SDLT if the directors already own their own property?

Scenario is i own my own family home. I have set up a Ltd to buy my first BTL. Do i have to pay the 3%? Amazingly i'm struggling to find a definitive answer on this. My solicitor says i will have to pay it but my mortgage broker is pretty adamant i don't if the Ltd is only buying 1 property.

The mortgage broker seems to think that if you set up say Property Company A Ltd and bought 1 place you could avoid the 3% and then if you set up Property Company B Ltd and bought another place you could again avoid the 3%. This seems a bit too good to be true to me?

Can anyone who has been in this situation give me a first hand answer?

Thanks in advance.

[essayer]

A limited company buying its first residential property pays the additional 3%

See s.128 Finance Act 2016

[fellatthefirst]

Thanks,

The property lawyer i am using for the purchase has just sent me a quote which includes the 3%.

I have no idea what the mortgage broker is going on about. He was so adamant on the phone that you don't need to pay it and you can just keep setting up Ltd's to avoid it.

[Jobbo]

Buying in a company, you also need to consider the 15% rate if the property is over £500k: https://www.gov.uk/guidance/stamp-duty-land-tax-co...

But if under £500k, yes - the 3% surcharge applies (i.e. as if it's an additional property bought by an individual). The reason for that is, fairly obviously, to avoid creating the loophole your mortgage broker seems to think exists

[ozzuk]

If your mortgage broker is suggesting that course of action, time to find a new broker!

[Jockman]

My ltd co just bought a residential property. As all the Owners have a residential property we had to pay the Enhanced Rate.

[Jobbo]

Jockman said:

My ltd co just bought a residential property. As all the Owners have a residential property we had to pay the Enhanced Rate.

If none of the owners owned any other property, it would still have to pay the higher rate.

[KevinCamaroSS]

Jockman said:

My ltd co just bought a residential property. As all the Owners have a residential property we had to pay the Enhanced Rate.

A limited company is a separate legal entity to the individual shareholders so it does not matter what the individuals own. A limited company has to pay the extra 3% anyway.

[Jockman]

KevinCamaroSS said:

Jockman said:

My ltd co just bought a residential property. As all the Owners have a residential property we had to pay the Enhanced Rate.

A limited company is a separate legal entity to the individual shareholders so it does not matter what the individuals own. A limited company has to pay the extra 3% anyway.

Thanks for the update.

[Jockman]

Jobbo said:

Jockman said:

My ltd co just bought a residential property. As all the Owners have a residential property we had to pay the Enhanced Rate.

If none of the owners owned any other property, it would still have to pay the higher rate.

Thanks also for the update.

[fellatthefirst]

Here's another question for you knowledgable lot...

So now my Ltd owns 2 flats. Say I want to sell my own house and move to another, do I now have to pay the extra 3% or am I exempt because my Ltd is a separate legal entity from me personally?

[Jobbo]

Your company is not relevant to your own SDLT. But in any case, if you sell your main residence to buy a new main residence you wouldn't have to pay the extra 3%, no matter how many other properties you own.

Caveat; this is a generic statement, not specific advice on your circumstances so you'd need to confirm with your own solicitor that you fit the criteria for this relief.

[KevinCamaroSS]

Jobbo said:

Your company is not relevant to your own SDLT. But in any case, if you sell your main residence to buy a new main residence you wouldn't have to pay the extra 3%, no matter how many other properties you own.

Caveat; this is a generic statement, not specific advice on your circumstances so you'd need to confirm with your own solicitor that you fit the criteria for this relief.

This.

[battered]

Your company is not you. Your own personal circumstances are of no bearing. It is a LIMITED COMPANY. In a related point, the money in your company is not your money. It took me a while to work this out. The task facing you as a director is to get the profits out of the company in such a way that you minimise your tax liabilities, and for this you need decent advice. Your house broker is not giving you this, as someone else said why would HMRC allow you a "free go"? It makes as much sense as the assertion that you can't get pregnant on your first time.

[anonymous-user]

Gents, not to derail but ...

I was planning to sell my BTL as my girlfriend and I are looking to sell and move up the ladder with out main residential home, if I am buying and selling my main home only do I still need to pay the 3% if I do not sell the BTL?

Any link to the paperwork?

Thanks.

[battered]

No, if it's your primary residence you pay the standard SD.

[fellatthefirst]

Is the BTL in your name or a company name?

[KevinCamaroSS]

fellatthefirst said:

Is the BTL in your name or a company name?

Irrelevant in this circumstance. Stamp duty is on purchase, so, the OP is selling his main residence and replacing it therefore standard duty applies.

[StangGT]

Anyone know the situation if a ltd company is buying a holiday let?

It's a strictly business asset, to generate profits for the company through short term lets to holiday makers...

thanks!