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bigduckontax, Accountant
Category: Tax
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Hi, We have 2 flats held in joint names with my wife that

Customer Question

We have 2 flats held in joint names with my wife that are rented out. One was our home for 3 years and has been rented since 2010 and the other was bought for the purposes of renting last year.
My question is it possible to transfer these properties in to a Ltd company and what is the process for doing so? Will there be stamp and how would we decide the transfer price? One property is worth 500k and the other 600k.
Many thanks
Submitted: 3 years ago.
Category: Tax
Expert:  bigduckontax replied 3 years ago.
Hello, I'm Keith and happy to help you with your question.
Yes, it is possible, but beware, as an individual you are each entitled to an Annual Exempt Amount of 11K against gains made on disposal and companies do hot have such protection. Your change of title to the company will in any event be a disposal for Capital Gains Tax (CGT) purposes in your tax account at the disposal valuation. This sum should be taken into account in the company's books as a creditor for ultimate settlement with you both. You have been caught by Benjamin Franklin's dictum that in life there are but two certainties, death and taxes.
CGT is levied at 18% or 28% or a combination of the two rates depending on individuals' income including the gain in the tax year of sale.
You can arrange a conveyance through any competent local solicitor or if they are land registered then you can do this by means of a direct transfer through the Land Registry. The latter is the cheaper option, but you must be sure of your title before proceeding down that road. There will be Stamp Duty on the conveyance, SDLT would be 3% (250K - 500K), 4% (500K - 1m) on the consideration.
I do hope I have helped with your question.