Incorporation into existing family Ltd Co.

by Readers Question

7 months ago

Incorporation into existing family Ltd Co.

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Incorporation into existing family Ltd Co.

We have had a property management company for many years and have a few properties held within the company. Our 2 adult children are also shareholders of this company.

If we incorporated the rest of our properties should we start another company or is it possible to utilise the existing company?

Sorry if this has been asked before.

Many thanks


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Neil Patterson

7 months ago

Hi Jane,

Yes you can do either, HOWEVER, if you intend to utlise incorporation reliefs to roll capital gains into shares in your existing company then you must understand that your childrens’ shareholdings will need to be diluted pro-rata to the equity you will be transferring into the company. Not doing so would result in a significant CGT bill. You also need to consider Stamp duty. I strongly recommend a tax consultation, which you can book via the link below, and which comes with a guarantee of total satisfaction or a full refund.

Roger P

7 months ago

start with a new company and use the partnership route for nil SDLT and section 162 for incorporation relief for CGT
HMRC want a company less than 12 months old to use these strategies, plus lenders seem to prefer new companies if you're remortgaging

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