8 Ground rents trapped in a company structure?

8 Ground rents trapped in a company structure?

9:19 AM, 8th March 2022, About 3 months ago 6

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We have 8 ground rents trapped in a company structure where we wish to rationalise into one, the active Buy to Let company.

The Holding Company contains 2 Ground rents, a subsidiary and practically inactive Management Company contains 6 Ground Rents and one Subsidiary to the Holding Company a BTL active company with mortgage borrowing.

How could we pass the Ground rents down to the BTL company?

We can’t move the BTL up the structure as this would require refinance and I am not interested in selling the ground rents at this time.

Many thanks

Andrew



Comments

by BernieWales

12:26 PM, 8th March 2022, About 3 months ago

If the ownership of the companies is exactly the same - then you can 'transfer' the freehold from one to the other, without the need for section 5 notices.

If the ownership is not exactly the same - then you need to go through the s5 process.

by JB

13:28 PM, 8th March 2022, About 3 months ago

Bernie, please canyou clarify exactly what you mean by 'If the ownership of the companies is exactly the same'/

by BernieWales

13:30 PM, 8th March 2022, About 3 months ago

If the shareholders of company A are exactly the same shareholders of company B ... and the shareholdings are exactly the same percentages in both companies.

by JB

13:52 PM, 8th March 2022, About 3 months ago

I have company A with 2 shares (I own both) and company B with 7 shares (I own all 7 shares). Therefore I own 100% of the shares in comapny A & company B and I am the sole director of both companies.

I'm in the process of carrying out a right of first refusal in order to transfer a freehold from company B to comapny A - as intructed by my solicitor.

Is a right of first refusal actually required for this?

by BernieWales

13:57 PM, 8th March 2022, About 3 months ago

If you are part way through the section 5 process, then I would carry on and see it through. There can be no argument thereafter (although the leaseholders accepting their right would be a spanner in the works).

However, where you are the 100% owner of both companies - then I've seen others "transfer" the property from one to the other, rather than "sell" from one to the other ... and thus no s5 needed.

by JB

14:00 PM, 8th March 2022, About 3 months ago

'the leaseholders accepting their right would be a spanner in the works'

Yes it would!


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