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bigduckontax, Accountant
Category: Tax
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I have a decent size property portfolio (£5mil)-and i am thinking

Customer Question

i have a decent size property portfolio (£5mil)-and i am thinking of transferring these properties to a new UK company, set up for the purpose. i am wondering whether there is any UK stamp duty exemptions for connected party transfers?
Submitted: 1 year ago.
Category: Tax
Expert:  bigduckontax replied 1 year ago.

Please specify exactly in which part of the UK your properties are situated? Scotland, for example, has a different form of stamp duty called Land and Buildings Transaction Tax following newly devolved powers.

Once I have this information I can advise you further.

bigduckontax, Accountant
Category: Tax
Satisfied Customers: 3360
Experience: FCCA FCMA CGMA ACIS
bigduckontax and other Tax Specialists are ready to help you
Customer: replied 1 year ago.

the properties are located in England-and the company would be registered in England also

Expert:  bigduckontax replied 1 year ago.

Stamp Duty Land Tax (SDLT) is normally based on the consideration, but there are exceptions. Here is the guidance from the Gov UK web site on the matter of SDLT):

'When property is transferred to a company, SDLT may be payable on its market value, not the consideration given. For example, if a property has a market value of £200,000 but the company only pays a consideration of £100,000, SDLT will still be payable on £200,000.

This applies in either of the following situations:

  • the person who transfers the property is ‘connected’ with the company - the definition of a connected person covers relatives and people who’ve some involvement with the company
  • the company pays for the property with shares in the company (partly or wholly) to the person making the transfer, where that person is connected to the company (but not necessarily the acquiring company).'

Thus these transfers will most likely attract SDLT depending on the value of each title, depending, of course, on your relationship to the company.

I am so sorry to have to impart such gloomy news, the company's SDLT bill could be quite large. As Benjamin Franklin once famously quipped, 'In life there are but two certainties, death and taxes.'

Customer: replied 1 year ago.

ok thanks

Expert:  bigduckontax replied 1 year ago.

Delighted to have been of assistance.

Please be so kind as to rate me before you leave the Just Answer site.

Expert:  bigduckontax replied 1 year ago.
Thank you for your excellent support.

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