Due to changes in taxation on investment property, individuals are increasingly looking to transfer property into a company. This is not always a straightforward process. Here at CDS Mayfair we can inform and assist with commercial and residential properties:
- That are owned by one or more individuals
- The Stamp Duty Land Tax (SDLT) implications where the ownership of the property will differ to the ownership of the company.
- Documenting the transfer and filing the SDLT return.
SDLT is the biggest issue when it comes to transferring residential property to a corporate body such as a company or partnership also known as a ‘non-natural person’. Such entities purchasing residential property for more than £500,000 are charged at the 15% higher rate. If the property is worth between £40,000-£499,999 the higher SDLT rate of 3% will be applicable. The SDLT rates may change again in the future.
If residential property is owned by more than one individual and is transferred into a partnership SDLT relief may be applicable if a partnership is established and the transfer of ownership has effectively not changed when the property is later transferred into a company.
At CDS Mayfair we can advise on:
- the legal and beneficial interests in the property being held by the partners and shareholders of the partnership and setting up a partnership deed;
- the potential SDLT payable; and
- any reliefs that might apply
- the actual transfer of the property into a company.
This is most important when the shareholders in the partnership are different to the current property owners and when commercial property is involved.
If you are an individual that owns a number of UK properties and think this might be a way of structuring your portfolio please contact subirdesai@cdsmayfair.com or justinajames@cdsmayfair.com.
CDS Mayfair are however not able to give financial advice.