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Sam
Sam, Accountant
Category: Tax
Satisfied Customers: 15712
Experience:  26 HMRC expertise, PAYE, Self Assessment ,Residency, Rental Income, Capital Gains, CIS ask for Sam Tax
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I have a residential property that I have bought it in 1997

Customer Question

I have a residential property that I have bought it in 1997 for £90000, but currently it is valued at £400000.
I would like to know if I transfer my property with a Nil value to a newly created limited company, then the company needs to pay Capital Gain Tax (CGT) for all 400000 value or am I getting exempt for the years I have lived there? Is it better to transfer the property with a current £400K value to the limited company or nil value? please advise?
Submitted: 10 days ago.
Category: Tax
Expert:  Sam replied 10 days ago.

Hi, Sam here , one of the UK tax Experts here on Just Answer, thank you for your question and I shall reply shortly

Expert:  Sam replied 10 days ago.

Hi

Thanks for your patience

You get credit for the time you lived there but you have no choice what value to use its the value at todays (or the transfer date ) plus you have stamp duty to pay

So when did you cease to use this property as your main residence ?

Thanks

Sam

Customer: replied 10 days ago.
OK
Expert:  Sam replied 10 days ago.

Hi

So when did this cease to be your main residence ?

Thanks

Sam

Customer: replied 10 days ago.
Few months ago
Expert:  Sam replied 10 days ago.

Hi

Then in fact if you transfer before 9 months have lapsed then there will be no capital gains as the time you lived there plus the last 9 months of ownership form a exemption under the private residence relief rules

So just stamp duty to pay at 3% higher rate

Thanks

Sam

Customer: replied 10 days ago.
The solicitor tells me with a nil value there is no stamp duty.
Expert:  Sam replied 10 days ago.

Hi

he is wrong the transfer triggers the high rate charge but no standard charge as below £500000

Thanks

Sam

Customer: replied 10 days ago.
But for the company taking the property with a nil transfer and current value of £400k,does the company needs to pay capital gain tax for £400k?as I am the company director and owner? Does the company get the relief?
Expert:  Sam replied 10 days ago.

Hi

Its not NIL transfer its £400000 for stamp duty

But for capital gains its a NIL capital gain position but still a £400,000 value transfer

The company then pay corporation tax (Not capital gains0 on any future sale when the transfer value is still £400000

Thanks

Sam