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Sam
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I am a landlord owning a property portfolio of approx £7million,

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I am a landlord owning a property portfolio of approx £7million, in a personal capacity. The portfolio is funded by bank loans and generally produces profits of approximately £300k per year.
My questions are as follows: 1) as part of a restructuring arrangement driven by the bank, I am thinking of transferring a large part of the portfolio to a newly formed family company-the bank is worried about succession issues (I am 57 years old). The plan is that I would own say 55% of the shares of Newco, and my 2 sons (both older than 19 years and currently at university), would own the balance of the shares.
It is important to understand that no money will change hands.
I have 3 questions in this regard:
-on any sale of the properties to newco-capital gains tax would be payable in the normal way? would any capital losses be restricted as to their future use?-for example, would I be able to use these losses against other unrelated gains?
-stamp duty: is there any stamp duty land tax relief for connected party transfers?
-what is the possibility of HMRC viewing the gross transfer of assets as one transaction and charging stamp duty at the highest marginal rate for all the assets being transferred?
any thoughts would be appreciated.
Submitted: 1 year ago.
Category: Tax
Expert:  Sam replied 1 year ago.
Hi
Thanks for your questions
-on any sale of the properties to new co-capital gains tax would be payable in the normal way? would any capital losses be restricted as to their future use?-for example, would I be able to use these losses against other unrelated gains?
Yes capital gains would arise on the increase in value of any of the properties, but in the same vein any decrease in property value would create a capital loss. which then could be used against future personal gains (not those that then might arise in the company)
-stamp duty: is there any stamp duty land tax relief for connected party transfers?
NO- stamp duty would be formed by the montage/loan amounts outstanding on each property
-what is the possibility of HMRC viewing the gross transfer of assets as one transaction and charging stamp duty at the highest marginal rate for all the assets being transferred?
No they would not - as each property is its own singular asset - with its own position of purchase and value
Thanks
Sam
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