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bigduckontax
bigduckontax, Accountant
Category: Tax
Satisfied Customers: 4074
Experience:  FCCA FCMA CGMA ACIS
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We own Commercial Investment property in Partnership and are

Customer Question

We own Commercial Investment property in Partnership and are thinking of transfering it into a LTD co ( same partners & same percentage share holdings)

What are the Tax implications ?

Will there be CGT?
Will there be SDLT?
Submitted: 3 years ago.
Category: Tax
Expert:  bigduckontax replied 3 years ago.
Hello, I'm Keith and happy to help you with your question.

Any transfer of landed property will incur SDLT depending on the transfer price. Considered by many to be an unfair tax as it goes up in steps, a quid over a step and SDLT whops on another 1 or 2%, a bit eye watering!

The Partnership members will also be liable to CGT on the profit on the sale based on the current market value less the purchase price pro rata with their partnership share ratios. The is a distinct possibility that Entrepreneurs' Relief will be available along with their individual Annual Exempt Allowances of 11.1K each(14/15 tax year).

On ultimate sale by the company SDLT and CGT will be assessed. Companies do not have an Annual Exempt Allowance nor is Entrepreneurs' Relief available. Roll over Relief might apply if funds generated are reinvested.

There you are, a quick canter through the general possibilities. I do hope I have helped. Always bear in mind Banjamin Franklin's dictum that in life there are but two certainties, death and taxes.