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bigduckontax, Accountant
Category: Tax
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We are about to put one company into a members voluntary liquidation

Customer Question

We are about to put one company into a members voluntary liquidation and assign the building assets to two new companies both with the same shareholders. We got authorisation from HMRC that we were OK to do this.
Can you let me know if SDLT is payable on this properties or that they are exempt. One of the properties has a twenty five year commerical lease attached to it.
Thank you.
Submitted: 1 year ago.
Category: Tax
Expert:  bigduckontax replied 1 year ago.
Hello, I am Keith, one of the experts on Just Answer, and pleased to be able to help you with your question. Here is the advice from the Gov UK web site: 'Companies can claim relief within the same group that buy or sell property to or from each other. The buyer of the property can claim the relief if both:the buyer and seller are both companiesat the effective date of the transaction both companies are members of the same groupCertain conditions and restrictions apply to SDLT group relief. To claim it, enter relief code ‘12’ in the SDLT Return. So to avoid SDLT then ensure that the new companies are within the same company group. This could be achieved by making one of the new companies the owner of the one to be liquidated. Alternatively there may be an entitlement to Group reconstruction or acquisition relief. HMRC advice SDLT23200 says: 'This relief allows land and buildings to be transferred between two companies, as part of a transfer of an undertaking in exchange for shares, where there is no change of ownership, without any charge to Stamp Duty Land Tax (SDLT).' Otherwise you will be caught by this duty. This answer is not valid for Scotland who under devolved powers now have a separate Land and Buildings Transfer Tax. I do hope that you find my reply of assistance.
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Customer: replied 1 year ago.
Thank you for your advice. If in the worse case scenerio we do have to pay SDLT do you know what the rate would be for an asset worth £3.7M please.Kind regardsStacey
Expert:  bigduckontax replied 1 year ago.
Thank you for your support Stacey. For non residential or mixed use property the rate is 4% [148K]. Just be thankful it is not residential where the rate would be a mere 12%!
Customer: replied 1 year ago.
That's still quite a lot to pay upfront. Can you opt to pay this in installments?
Expert:  bigduckontax replied 1 year ago.
SDLT is payable within 30 days of the transaction; there is no facility for staged payments. You could try asking the Stamp Office in Birmingham, but expect a dusty answer. Sorry, Stacey

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