In this video property solicitor Gulben Uzum talks about a form of property ownership that is becoming increasingly propular with landlords and property investors; owning property via a Limited Company.
This method of ownership brings tax benefits and can simplify inheritance tax planning however, it’s not without it’s complexities and costs. Gulben explains some of the considerations and breaks down the process of transfering property into a limited company.
She covers:
- Valuation
- Forming a Limited Company
- Financing
- Legal and Tax Implications
- Stamp Duty and Land Tax – you may want to visit our stamp duty calculator for a limited company purchase
- The Transfer Process
https://youtu.be/0GThpJg7pNM?si=mA5N7haT_cG2gTH5
Prefer to read about transferring property into a limited company?
Here’s the video transcript.
Today we’ll be looking into a topic that’s increasingly popular among property investors in England and Wales, transferring a property to your limited company.
When you’re looking to optimise your tax position or streamline your property portfolio, understanding the ins and outs of this process is crucial. Let’s break it down.
Why would you consider transferring your property into a limited company?
Many investors choose this route for potential tax benefits, such as lower corporation tax rates and the ability to offset mortgage interest as an expense. It can also offer more straightforward inheritance planning.
However, transferring a property into a limited company isn’t without its complexities and costs. Let’s go through the key considerations and steps involved.
Here are the main steps you need to follow.
Valuation – Have the property professionally valued.
Forming a limited company – If you haven’t already, you’ll need to set up a limited company.
Financing – Arrange for the necessary financing as transferring your property might involve refinancing your property.
Legal and tax implications – Consult with a solicitor and an accountant to understand the legal and tax implications.
Stamp duty and land tax – Be aware that transferring property to a limited company typically incurs SCLT.
Transfer process – Execute the transfer through a solicitor.
Let’s look into each of these steps in more detail
Valuation
Getting an accurate valuation of the property is essential.
This will determine the market value and help in calculating potential taxes.
Forming a limited company
Next, if you haven’t already formed a limited company, you’ll need to do so. This involves registering your company with Companies House and setting up the necessary bank accounts and financial records.
Financing
Financing is another crucial step. Transferring a property might require you to refinance your existing mortgage or obtain new financing. Ensure you have the appropriate financial arrangements in place.
Legal and tax implications
Consult with a solicitor to understand the legal requirements and an accountant to grasp the tax implications. This includes understanding capital gains tax, corporation tax and any potential release or exemptions available.
Stamp duty and land tax
When transferring property to a limited company, SDLT is usually payable. The rates depend on the property value and the type of property being transferred. It’s essential to budget for this tax.
The transfer process
Your solicitor will handle the legal transfer of the property. This involves preparing and submitting the necessary legal documents to officially transfer ownership to your limited
company.
To recap, transferring property to a limited company involves several steps. Valuation, forming a company, arranging financing, understanding legal and tax implications, paying SDLT and executing the transfer.
We hope this video has clarified the process of transferring property to a limited company. For expert help and advice on your property transactions, get in touch with Starck Uberoi Solicitors.
For more information please visit Buying or Transferring property into a Limited Company
You can also get a quote for legal fees for transferring a property into a limited company via our conveyancing quote calculator
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For an appointment at any of our offices, email us at solicitor@starckuberoi.co.uk or call 020 8038 5354.
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