Declaration of Trust and mortgage buy to let

Suggest you contact the SDLT office directly to find out whether this idea would constitute you 'owning 2 or more properties', even though it's within a Ltd Co...interesting concept though.

I have not called SDLT yet. I have had legal opinion and It seems that it will be okay but my solicitor is not committing yet as he not gone through all the new changes. I believe one is not allowed to live in a property owned by limited company in which he/she has shares unless they pay a rent. Also if there is a BTL mortgage on it than it can't be your main residence. Transfer to a connected limited company is considered a disposal for SDLT purposes. Hence this strategy might be okay.

Well I wish you luck with it...and still recommend you contact SDLT office for your own peace of mind. The new law still refers to the ownership of 'two or more properties' at the end of the transaction and with Ltd Co properties still counting if you own a main residence, then I wouldn't be surprised if it counts the other way around too!! Just saying...

Reply to the comment left by "Sunny K" at "07/04/2016 - 19:09":

Nice one Sunny, I like it ?
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Reply to the comment left by "Mark Alexander" at "07/04/2016 - 21:21":

hello, thanks for your response

on the 3% SDLT I don't necessary agree with your comment where you imply that if I give the property to my wife, I might be able to not pay this 3% tax on the new property ( "However, based on what I said at 1) above, YOU may only own one!" ).
I indeed don't own any other property but reading https://www.gov.uk/government/consultations/consultation-on-higher-rates-of-stamp-duty-land-tax-sdlt-on-purchases-of-additional-residential-properties/higher-rates-of-stamp-duty-land-tax-sdlt-on-purchases-of-additional-residential-properties
see section 2.4
it states:
"property owned by either partner (and any minor children) will be relevant when determining if an additional property is being purchased or not. Therefore, an individual buying a property may be liable for the higher rates if his or her spouse or civil partner has an existing residential property. If the spouse or civil partner then sells that residential property they may be able to claim a refund"'

The reponses to questions looks to confirm this (https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/508156/SDLT_summary_of_responses_final_14032016.pdf):
"As such, the government will treat married couples as one unit for the purposes of the higher rates. "

So even I give the flat to my wife before buying the new one, it doesnt' look to change my liability to pay the 3% on the new flat.
The only way would be to give her the flat (tax free), divorce and buy alone the new flat. And as well I would need to proove that I didn't divorce for tax avoidance purposes.

If my spouse sells within 3 years then it should be ok to get back this SDLT.
I am wondering how is computed the amount subject to CGT in this case ? As it was my main residence, I could have claimed some PPR relief but if I give to her, will does she pay CGT on the difference between the sold price and the market price when I give the flat to her, without any PPR or will the taxman consider the price sold by her minus price bought by me and apply some PPR because of me?

In any case, my case is even more complex as what stated here so I guess I will look for some profesionnal advice...I intend indeed to borrow some equity from the flat and I would need to do a Buy To Let on this flat on my name.

Adding a small comment about Alex's point 2) , speaking about the fact that I would give (gift) property to my wife:

"2) If you do the above I am not sure how this might affect PPR relief and Letting Relief for CGT purposes at the point of sale. I recommend you to seek professional advice from an accountant on this point."

My feeling is that she will be entitled to maximum PPR (ie from date I bought to date we move out) relief as per CG64950 (http://www.hmrc.gov.uk/manuals/cgmanual/CG64950.htm) , which states:

"If a residence is transferred between a husband and wife who are living together (...) whether by sale or by gift, the period of ownership of the transferee is treated (...) as beginning at the beginning of the period of ownership of the transferor (...) The husband and wife or the civil partners must be living together, (...) and the residence must be their only or main residence at the date of the transfer."

So even I do not save the 3% by transfering my current flat before buying the new one, I would permit her to benefit of full PPR for the period I lived inside...(and this is not the case if I transfert after we move out).

Having considered the strategy that sunny has referred to I am of the opinion that selling the current PPR to a Newco is the way forward on the basis that NewCo is a completely seperate legal person.

Newco would pay SDLT but there would be no CGT implications for the vendoron the basis that the property has always been his PPR.

Now the interesting point here is that NewCo will be buying its first residential property so will it have to pay the extra 3% SDLT? I think not.
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Reply to the comment left by "Mark Alexander" at "08/04/2016 - 05:10":

I agree that 3% surcharge is not due in case of Tim. It might be due for us as We have 4 other properties on BTL. The strategy is an extension of making the cheapest property in your portfolio the main residence and than disposing it before buying a new higher value main residence to avoid bigger SDLT. However why sell when you can transfer it to your limited company to dispose.This will reduce your SDLT bill as well as transfer your property to c24 friendly structure, The higher value property we buy is generally a > 3 bed semi or detached house in London. We than apply for planning permission for rear/side extension, loft conversion and finally flat conversion. Once approved all building works are zero percent VAT. Once the work is completed your main residence is again one of the two/ three flats. This creates an nice cycle to do again. I am working on this strategy for the next few years.

Just confirmed with SDLT office. The arrangement is okay. Transfer to limited company of primary residence will incur an additional 3% SDLT at market value price while the SDLT on new purchase will NOT incur additional SLDT rate. Market value as we know, is a self assessment value which should be fair in eyes of HRMC.

Reply to the comment left by "Sunny K" at "08/04/2016 - 10:49":

hi Sunny. Interesting, but you mean in this case that the company would pays standard SDLT +3% on the current flat ?
So this is not worth is (SDLT(current flat) + 3%)*market value of current flat > 3%*market value of new flat ?