Can I change title deeds for small industrial estate?
Our company has a small industrial estate with 8 units, these were all built upon land that is registered to my parents as the land was originally purchased to use for my father’s engineering business.
Over a period of 35 years, he has built 8 units which are now individually let and the income is collected via a limited company of which myself, my brother and my parents are all shareholders.
My parents are now reaching their mid 80’s my Father is still very much involved in the running of the company but we are looking to the future now and concerned about inheritance tax that will need to be paid upon the death of both parents.
I have looked into the tax relief on businesses and am somewhat confused if this is applicable to a company that owns commercial units for letting purposes and also the confusion on the land as this is not registered to the limited company but to my parents.
My question is could we transfer the deeds for the land into the limited company name and is this the sensible option or is there another way?
Any information or help would be greatly appreciated as we have been looking for some time into this and seem to be getting nowhere.
Many thanks
Jane
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Member Since February 2011 - Comments: 3453 - Articles: 286
10:13 AM, 5th August 2024, About 2 years ago
Hi Jane,
I would recommend a tax advisory service with a very wide set of skills and experience. Someone like Forbes Dawson >> https://forbesdawson.co.uk/
Member Since July 2013 - Comments: 1996 - Articles: 21
10:47 AM, 5th August 2024, About 2 years ago
Jane
I recommend you take professional advice from your accountants. Transferring the property to the company may trigger CGT liability. Also, on what basis is the company receiving the income? You might want to check that your family’s tax affairs are in order.
Member Since January 2011 - Comments: 12196 - Articles: 1396
6:32 PM, 5th August 2024, About 2 years ago
Reply to the comment left by Ian Narbeth at 05/08/2024 – 10:47
I agree.
My concern here is that the existing arrangements might fall foul of the Finance Act 2009 legislation (schedule 25 I recall) “Tranfer of Income Streams”.
Is that what you were alluding to Ian?
Member Since August 2024 - Comments: 1
7:27 PM, 5th August 2024, About 2 years ago
Reply to the comment left by Ian Narbeth at 05/08/2024 – 10:47
I don’t understand the question, all rents are paid into the limited company and declared as such.
Member Since January 2011 - Comments: 12196 - Articles: 1396
11:05 PM, 5th August 2024, About 2 years ago
Reply to the comment left by Jane Harvey at 05/08/2024 – 19:27
I think the point is that unless the company owns the beneficial interest in the property it may not have been entitled to account for receiving the rent from a tax perspective. If this is the case then HMRC could decide to look through the Limited Company arrangement and re-calculate what the tax should have been if all of the rent had been paid to the beneficial owner, ie your father.
I am very sorry to be the bearer of bad news.
Your Accountant should have been aware of this and you may have a valid professional negligence claim for any costs of rectification.
Please seek independent professional advice on this matter.