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Keep property private or transfer to limited company ?


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So I currently own my own home where I have been living for 4.5 years which I was lucky enough to buy myself (saved by living with parents). My long term partner (not married) has just agreed to buy a new home for us to move into which will be an upgrade for us both and this will be in her name (until married).
 

I now have the fortunate option of what to do with my property (Paid 178k now worth approx 210k - 2 bedroom on South coast). My first thoughts is to rent out my property but given my circumstances obviously the property is not within a limited company and I am just on the edge of the higher tax band 40% with my full time job. 

I guess I am trying to figure out the most cost effect / tax effective way to let out my property given these circumstances. Should I try to transfer to ltd company or just keep it private ? Be interested to hear your thoughts.  

Long term I would like to save up for another deposit on another property. I can’t release capital from my current property to do this as have to have 25% LTV for a buy to let mortgage (Just over 50K currently). 

Thanks in advance 

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A company will pay at least 3% SDLT (£6,300) on transfer of property to it. You’ll pay at least £5k CGT on transfer. That’s an £11k cost straight away! Is your partner a higher rate tax payer? It might be worth thinking about income tax planning. A lot will depend on rental yield I guess.

Jerome

Jerome@TaxAntics.co.uk

www.TaxAntics.co.uk
 

 

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