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Stamp duty on primary residence due to having a BTL


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Situation is

  • Owned a property as main residence
  • put it out to rent while working abroad (over 10 years)
  • now want to buy a new primary residence as back in uk
  • I assume new residence will be subject to extra 3%?  And is there any way around this - short of selling the BTL as the stamp duty delta is circa 25k

 

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7 hours ago, haf1963 said:
  • Owned a property as main residence
  • put it out to rent while working abroad (over 10 years)
  • now want to buy a new primary residence as back in uk
  • I assume new residence will be subject to extra 3%?  And is there any way around this - short of selling the BTL as the stamp duty delta is circa 25k

 

One potential solution is to use incorporation relief to transfer your properties to a ltd co. Under incorporation relief, you would transfer your property to a limited company without paying stamp duty. I wrote an article about it here. At that point, you would own no properties in your own name. 

You would need to seek specialist advice. But if you qualify, you could save tons in tax
 

_______________________________________________________________________________________________________________________________
Vin Gupta
Property Investor and Developer
UK Property Blog: https://evolutionblogger.com/article/uk-property-articles
Travel Blog: https://soulfultravelguy.com/

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Thanks for the tip but the company idea doesn’t really work for a sole owner - as in my case.. It’s looking like a case of CGT versus extra 3% but will see if solicitor/accountant can come up with anything

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If you are going to sell, then you should sell sooner rather than later. The longer the property is a buy to let, the more CGT is liable

If you have a property that was your primary resident 90% of the time and 10% Buy to Let. Then your CGT liability is only 10% of the full value. So the longer you keep your property as a BTL, the bigger the CGT problem you have

_______________________________________________________________________________________________________________________________
Vin Gupta
Property Investor and Developer
UK Property Blog: https://evolutionblogger.com/article/uk-property-articles
Travel Blog: https://soulfultravelguy.com/

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I just had another suggestion - which i am not convinced is legit but worth looking at. Essentially i can ‘gift’ the BTL to a family member and (7 year rule aside) this is perfectly ok with no cgt implcations - though not sure what stamp duty applies in this case. Then at some point in the future there maybe an option to gift it back? Seems to be ‘too good to be true’ but not sure at all..

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59 minutes ago, Vineet Gupta said:

If you are going to sell, then you should sell sooner rather than later. The longer the property is a buy to let, the more CGT is liable

If you have a property that was your primary resident 90% of the time and 10% Buy to Let. Then your CGT liability is only 10% of the full value. So the longer you keep your property as a BTL, the bigger the CGT problem you have

The property has been BTL for 20+ years so no it much scope to minimise CGT if sold… 

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