Transferring Your Current Properties into a Company

What do you need to consider? Sadly the answer to this question is “It Depends!!”

However, there are some general principles that we can consider when looking at this situation.

There are a couple of questions which depend on your tax position and a few that relate to your preferences.

  • Are you a higher rate taxpayer, additional rate taxpayer or not? 
  • Will any property disposals generate a profit greater than the current tax allowances and take you into being a higher rate taxpayer
  • There will be capital gains tax on the property disposals on which you have made a gain. How much will it be? 
  • Are any properties in a loss position which will offset the profits to reduce the overall capital gains tax?
  • Remember stamp duty! This will be payable whatever happens.
  • How is the property owned? With debt or outright?
  • For debt funded properties, remember there is a refinancing cost to change mortgages and there could be early repayment clauses that are activated.
  • Who is going to own the limited company? Are you extending shareholdings to help reduce any future inheritance tax issues/ liabilities?
  • What are your future plans? Keeping? Expanding? Selling? 

This is not a complete list of questions but just some key aspects that you need to consider and which will affect the final decision.

Property Business This is a general summary of the position as it stands at the moment. However, further changes made by the government may affect this in the future. You should always have a good idea of what your objective is in transferring properties, as sometimes the cost will achieve the objective and other times it is better to leave the position as it is, but only you can make the decision of what is best for you and your circumstances.

If you need any assistance in calculating the cost of moving properties into a corporate structure we have a formal process to help you make an informed decision using our in-house tools.

We are offering, until the end of February 2019, a complete review of this with you at a one-off price of £225.00 plus VAT. Our normal price is £450.00 plus VAT.