Best way to UK Ltd Co for Aunt with Offshore Ltd Co?

by Readers Question

10:30 AM, 1st August 2018
About 5 months ago

Best way to UK Ltd Co for Aunt with Offshore Ltd Co?

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Best way to UK Ltd Co for Aunt with Offshore Ltd Co?

My aunt (+70) cannot raise mortgage finance within her Offshore company, on buy to let property. She has no mortgage at present property value £500k.

She wishes to incorporate UK ltd company and transfer the property from offshore to onshore Uk Ltd. I am age 40 and her nephew.

She wishes I join the business and help raise the mortgage finance from within the UK mortgage market, using a buy to let Ltd mortgage.

What is the best way for me to get introduced into the UK ltd company as a shareholder, an issue of shares?

What steps should she take into shift the UK property from the Offshore company into the UK Ltd company?

She wants to minimize stamp duty and capital gains on transfer, but wants to ensure she follows all the correct steps to ensure she in line, as the main commercial reason for the move is to raise mortgage finance, as lenders do not wish to fund the Offshore vehicle.

Also here age means she needs to plan for estate duty purposes and wishes for me to help manage the business. I will become 50% shareholder.

Many thanks

Jay



Comments

Mark Alexander

12:09 PM, 1st August 2018
About 5 months ago

Hello Jay

If the property is transferred to a UK Limited Company then Stamp Duty will be payable.

However, your Aunt could gift the property to you personally, and on that basis there would be no Stamp Duty. It might also be easier to raise finance, but please consider the restrictions on finance cost relief.

You Aunt should also investigate whether CGT will be due in her Country of residence, and there may be CGT to pay in the UK if the property has appreciated value since April 2015.

The property would then be outside the estate of your Aunt, but further investigation is recommended in regards to IHT as there are many other factors that could affect this.

The above must not be considered to be advice. A full consultation is recommended, please see https://www.property118.com/tax

Mark Alexander

12:14 PM, 1st August 2018
About 5 months ago

Jay

Further thought, you have not said why your Aunt wants to raise finance.

If it is for her personal use, what’s to stop you raising the finance and gifting or even loaning it to her?


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