How JustAnswer Works:
  • Ask an Expert
    Experts are full of valuable knowledge and are ready to help with any question. Credentials confirmed by a Fortune 500 verification firm.
  • Get a Professional Answer
    Via email, text message, or notification as you wait on our site. Ask follow up questions if you need to.
  • 100% Satisfaction Guarantee
    Rate the answer you receive.
Ask bigduckontax Your Own Question
bigduckontax, Accountant
Category: Tax
Satisfied Customers: 4963
Type Your Tax Question Here...
bigduckontax is online now

I have bought a house and set up a business registered at companies

Customer Question

I have bought a house and set up a business registered at companies house. I am now looking to change this decision and put it under my name and it will become a 2nd property as my situation has changed. I believe if I do this id need to pay stamp duty. Is there anyway to mitigate this or avoid completely?
With thea 2nd property i will be renting it out. I will then sell my 1st property and then move in the 2nd property for the next 6 months. Would I be liable for any tax? Many thanks
Submitted: 2 years ago.
Category: Tax
Expert:  bigduckontax replied 2 years ago.
Hello, I am Keith, one of the experts on Just Answer, and am pleased to be able to assist you with your question. Stamp Duty Land Tax (SDLT) or its Scottish equivalent, Land and Buildings Transaction Tax (LBTT) is payable by a buyer of landed property and is based on the consideration passed for the transaction ie what was paid for it. It therefore depends upon the consideration in the company's books. In any event neither of these kick in unless the consideration exceeds 125K. Renting out a property will incur Income Tax on the net rental at your marginal rate of tax. For your first property, if it is your sole or main domestic residence there is Capital Gains Tax (CGT) on the gain made on sale, but Private Residence Relief (PRR) applies which relieves the CGT at 100%. On sale of the second property CGT will apply to the gain. PRR might apply if you elected the second house to receive this relief within two years of acquisition thereof. If you did not so elect HMRC will determine which house should receive RPR from the facts. The gain would be adjusted for occupation time by you and reduced proportionately. For the last 18 months of ownership PRR is extended even if you were actually not in occupation. You would receive Lettings Relief (LR) up to 40K against the gain on the let property. In addition you would be entitled to your Annual Exempt Amount of 11.1K to offset the gain. Without a tad more clarity and the values concerned I am unable to be more precise. I do hope my reply has been of assistance.