New stamp duty

[JCKST1]

Hi, I have read about this briefly online but cant see any clear answers.
I have a property which is let out and looking to buy another house which I will be living in, with the new stamp duty its about an extra £6000 up front.

If I was to put the rental property in to a LTD company would I avoid this additional stamp duty? I know it is probably not that easy but any advice is appreciated.
I run a LTD company now so generally know how the process works, I will be buying more properties to rent out this year and will build a portfolio so going LTD early might be a benefit anyway.

Cheers

[leemanning]

Have a look in the finance forum, there's been loads written about this.

Essentially if you can do it under a Ltd company, then you'll avoid this extra stamp duty. However many people are suggesting that potentially in the future there may be extra taxation against companies holding BTL or property. Obviously nothing official yet, but it does seem like a loophole that is likely to be closed in the future.

[wattsm666]

The ltd company would have to pay stamp duty on the acquisition of the btl. Mortgage rates may change as well when you go into a corporate vehicle.

Finally disposal to the company would trigger cgt for you.

[blueg33]

We are waiting to see whether our SDLT hoed up by about £130k per development. If she depends on how they apply the exemption for multiple property owners.

[KevinCorvetteC6]

I'm a bit confused. You say you have one property which is already let out? No stamp duty due there as already owned. You are looking to buy another to live in? Surely this will be your main residence so will not attract the additional 3%.

Otherwise as wattsm666 says, to sell the existing rental property to a ltd company will incur costs to yourself as well.

[Jobbo]

KevinCorvetteC6 said:

I'm a bit confused. You say you have one property which is already let out? No stamp duty due there as already owned. You are looking to buy another to live in? Surely this will be your main residence so will not attract the additional 3%.

Nope, the consultation paper says you only avoid the 3% if you are selling a main residence at the same time as buying a new one.

[AndStilliRise]

Jobbo said:

KevinCorvetteC6 said:

I'm a bit confused. You say you have one property which is already let out? No stamp duty due there as already owned. You are looking to buy another to live in? Surely this will be your main residence so will not attract the additional 3%.

Nope, the consultation paper says you only avoid the 3% if you are selling a main residence at the same time as buying a new one.

Correct. And that you only get the 3% back as a refund from HMRC once your main residence is sold.

[Jobbo]

AndStilliRise said:

Correct. And that you only get the 3% back as a refund from HMRC once your main residence is sold.

Depends if you complete sale and purchase of main residence on the same day; that way you wouldn't pay the 3% in the first place so wouldn't need to claim it back.

Worst of all worlds appears to be selling your main residence and renting for a brief period before completing the purchase of your next one; you have to pay the 3% and there's no way to claim it back.

[All examples based on owning BTL properties as well.]

[KevinCorvetteC6]

But what if he does not have a main residence at this time?

[Jobbo]

Jobbo said:

Nope, the consultation paper says you only avoid the 3% if you are selling a main residence at the same time as buying a new one.

See my reply above, when you asked the same question before.

[JCKST1]

Thanks for replies everyone. I did not think it would be that easy and looks like I will have to foot the additional costs unfortunately. Very annoying!!

[JCKST1]

Bumping this one up rather than starting a new thread.

Would it be possible to put the BTL property I own in to my parents name to try and avoid this additional stamp duty?
They are both mid 50's, retired and own there house outright which is worth around 250k.

Probably a long shot but worth asking.

[Jobbo]

Have you considered taking indemnified advice on this? I can see issues with that but I'm not willing to comment since it is inappropriate to give specific tax structuring advice; I'd potentially be assuming liability to you.

[Eric Mc]

JCKST1 said:

Bumping this one up rather than starting a new thread.

Would it be possible to put the BTL property I own in to my parents name to try and avoid this additional stamp duty?
They are both mid 50's, retired and own there house outright which is worth around 250k.

Probably a long shot but worth asking.

It therefore becomes an additional property for them, so the additional 3% SDLT still applies.

[Jockman]

JCKST1 said:

Bumping this one up rather than starting a new thread.

Would it be possible to put the BTL property I own in to my parents name to try and avoid this additional stamp duty?
They are both mid 50's, retired and own there house outright which is worth around 250k.

Probably a long shot but worth asking.

That would mean selling it to them. This would crystallise potential capital gains tax on your part. It would then form part of their estate and possibly liable to inheritance tax in due course.

Is it worth it?

[JCKST1]

Well that plan fell flat on its face lol.

Looks like I will have to just pay the additional £6000 or so on the second property which is annoying as it means more additional saving or hope the bank value the property at a higher amount and I can pull a little bit more equity from it.

[blueg33]

New SDLT rules have increased the SDLT costs on my projects typically from £20k to £140k and impacted on the ongoing valuation. That is about 30% of the gross margin.