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Inheritance, Tax, LTD Company, Property.


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Hi everyone, 

I hope you are all safe with the covid 19 situation and all. 

Im in a position where my family will be selling a property and with a portion of this I will be using it to set up my own company and invest using this lump sum.

To make this as simple as possible my mother will be selling a property for £300k. From that my mother will be buying a £200k house through a LTD company having £100k left over for retirement. 

Myself and my sister are looking at the best way to minimise the tax and be able to secure the £200k property for us in the future. Once the £200k property has been purchased we would refinance it and split that between myself and my sister (going off the fact the refinance sum would be £150k). I would use this money to invest and we would split the repayments in half. 

What I am looking to do is to purchase multiple properties through a limited company (thats not to do with my family) with that investment. If the original £200k property was bought via a company that myself, sister and mother set up, then refinanced, could I use that money (the £75k) to invest through my new company (my investment business) without having to pay taxes on it? Essentially moving £75k from one limited company into my own without tax implications (eg paying dividens as I would be reinvesting it and not spending it on myself (eg cars). 

So basically how can I access the funds from the refinanced property to use in my new business without paying tax on it. 

I appreciate this is a LOOOOONNNGGGGG question but I have scoured the internet and after reading many books thought I would try my luck here

Any feedback is welcome

Many Thanks 

David Tate 

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You would not ordinarily be able to extract money from a limited company without a tax charge arising on you.

However, there are usually no tax implications on a company lending money to another company. 

That aside, is there a specific reason that your mother is investing via a company? There could be a simpler more flexible route to consider.

Jerome

Jerome@TaxAntics.co.uk

www.TaxAntics.co.uk
 

 

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No there is no reason on if she were to buy via a company or in her own name. 

She just wanted to pass over the refianced sum in the most tax effecint way possible and thought that by putting it in a company it would be easier. 

What would you suggest as a more flexible route? 

Thanks 

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