It’s official – NO NEED to refinance when incorporating into a limited company

It’s official – NO NEED to refinance when incorporating into a limited company

19:00 PM, 1st February 2021, About A year ago 45

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HMRC CONFIRMS you do not have to refinance all your properties when you incorporate your portfolio into a Limited Company.

In this video below, Mark Alexander from Property 118 & I, Ranjan Bhattacharya, break down exactly what this means for property investors!

HMRC Capital Gains Manual CG65745:

https://www.gov.uk/hmrc-internal-manuals/capital-gains-manual/cg65745

 

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Comments

DP

11:02 AM, 16th February 2021, About A year ago

Reply to the comment left by Mark Alexander at 16/02/2021 - 10:08
Ok, thank you but, could you or another subscriber highlight what the ongoing costs are likely to be of incorporation before taking this step

Mark Alexander - Founder of Property118 View Profile

11:08 AM, 16th February 2021, About A year ago

Reply to the comment left by DP at 16/02/2021 - 11:02
It would be unrealistic to hazard a guess without the full details.

That would be like asking an insurance broker to guess what car insurance premiums might be without him knowing any details of the car or who will be driving it.

DP

11:47 AM, 16th February 2021, About A year ago

Reply to the comment left by Mark Alexander at 16/02/2021 - 11:08
I have small portfolio consisting of six BTL units and two small commercial shops , that's it, not looking for accurate amount just an idea such as you discuss in the videos. I can go ask an accountant as most would give an idea of cost I guess. Only if it's so complicated then it makes the alarm bells ring a bit as no one wants to enter into a one way street without having any idea of where its heading. Think that's reasonable.

DP

12:45 PM, 16th February 2021, About A year ago

Reply to the comment left by Mark Alexander at 16/02/2021 - 11:08
Another question, not sure if you could help with, concerning SDLT when transferring into a company, is it calculated on each property or on the value of the whole portfolio ?

Mark Alexander - Founder of Property118 View Profile

12:50 PM, 16th February 2021, About A year ago

Reply to the comment left by DP at 16/02/2021 - 12:45
OK, based on what I know so far, legal costs will be £8,000 + VAT to deal with a Substantial Incorporation not including IHT and legacy planning. Cannot say whether this is the right way to go at this stage, there may be better options.

CGT and Stamp Duty not known due to insufficient information, same for other tax planning opportunities.

Mark Alexander - Founder of Property118 View Profile

13:09 PM, 16th February 2021, About A year ago

Reply to the comment left by DP at 16/02/2021 - 12:45
There is no simple answer to this question either, because there are various reliefs applicable to a whole variety of situations.

It's hard to believe that HMRC once had the advertising tag-line of "tax does not have to be taxing"

DP

14:06 PM, 16th February 2021, About A year ago

Reply to the comment left by Mark Alexander at 16/02/2021 - 13:09
its a nightmare, why have we been thrust into all this, having to spend a fortune just to understand what to do for the best to hang on to the days pay and a bit of pension for later on. No yacht. Moving the goal posts is one thing but ripping the rug out as well is another. When you get along a bit in life you dont want all this hassle and it isn't easy or cost effective to keep re-inventing what you do etc. Thank you HMRC, most kind.

Mark Alexander - Founder of Property118 View Profile

14:27 PM, 16th February 2021, About A year ago

Reply to the comment left by DP at 16/02/2021 - 14:06
I completely agree with you and was one of the most prolific campaigners against these tax changes.

DP

15:16 PM, 16th February 2021, About A year ago

Reply to the comment left by Mark Alexander at 16/02/2021 - 14:27
Yes and thank you, you are doing us proud, its a pity the politicians are not listening more effectively, perhaps they are, it shouldn't be just to do with votes its each and everyone's lives who are in this situation that have been quite seriously affected by it and these are people who have invested their savings or whatever into something to provide not only for their own livelihoods and for older age but housing people and actively running their portfolio's themselves. I have housed people who couldn't get anywhere, single mothers, a family who were desperate and because they couldn't afford the deposit and were relying on Housing Association for it, had been turned away many times. They have been with me now for six years, never owed a penny and I have, so far not increased their rent. It was a worthwhile thing and made perfect sense to do it and was for the long term with a lot of us and now we are faced with either having to form a company to escape CGT when we sell and the fear of what level that might be levied in the future with no account for inflation which would mean that there might not be enough left to pay off the finance even when selling. And apart from this, the worst thing is, that they do not appear to have offered any real alternative that I can see or made any allowance for those of us that made these investments because whatever actions are available they may not always be appropriate or make financially sense. It just feels like punishment. Had we have known this at the start I know I for one would not have invested into it with this to look forward to. Ok, risk and all that, but this is not to do with the markets and usual type of risk that you expect and make allowance for, its ....... just awful, I am sick and tired of what has happened and will vote for the Green Party from now on because you might as well try to do something worthwhile for our dear planet than vote for people who do things like this.

Mark Alexander - Founder of Property118 View Profile

15:53 PM, 16th February 2021, About A year ago

Reply to the comment left by DP at 16/02/2021 - 15:16
The idea for Section 24 came from the Green Party!

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