How long does it take to incorporate?

by Readers Question

11:12 AM, 13th June 2017
About 2 years ago

How long does it take to incorporate?

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How long does it take to incorporate?

I’m getting nervous about the SDLT exemption available for partnerships incorporating being withdrawn.

Also, in the last two Budgets there has been mention of incorporation relief being “simplified” – what does that mean? Could it mean a withdrawal for businesses that don’t trade, or perhaps only property rental businesses if recent history is anything to go by?

I know it takes up to 28 days for HMRC to respond to non-statutory clearance requests because this is on their website. However, I also want to use BICT because I also want to avoid having to refinance in to save time and the obvious costs. How long does that process take?

Thanks

Angie



Comments

Mark Smith (Barrister-At-Law)

16:54 PM, 13th June 2017
About 2 years ago

Dear Angie and readers,

The SDLT exemption for partnerships incorporating has been in existence for many years, and as far as we know there are no plans to remove it. The same goes for incorporation relief for property rental businesses that incorporate.

That being said, it would not take much for HMRC to realise the discrepancy between the treatment of sole traders and partnerships for SDLT purpose, or to look to adjust the criteria for CGT relief, so although we never advise taking a step in anticipation of what might happen, there is no reason to hold back at this stage if it all stacks up for you now.

BICTs can be formed and executed within days, so long as all the information is to hand, and clearance is not asked for or advised as being needed. P118 offers a clearance application service and CB offers additional due diligence, all fully refundable if we cannot advise you to go ahead.

Partnerships are defined in the 1890 Act, and exist when two or more people carry on business together with a view to profit. No other formality is needed. The partners must 'carry on' the business, ie work in it and promote it, and must share the rewards (if any). This is often the case in domestic relationships, and many of our clients are in partnerships without even knowing it. Absence of a written agreement, or a partnership UTR, does not mean you do not have a partnership.

jay shah

9:28 AM, 15th June 2017
About 2 years ago

My wife and I am in domestic partnership without any written agreement or partnership UTR .
We have 30 plus buy to let . Of which two are small commercial, 9 are semi commercial - retail shop with flat above ( self content flats on ASt ) rest are residence buy to let , small two / three bedroom flats . There is no mortgage in any one of them . Both of us work on this portfolio. Duties are not split. Just get on with it. Most Maintenance is outsourced. Also some managed by High street letting agents. I am in early sixty in poor health. Wife same. Two boys , both educated - double degree. Not married yet. Older one A1 charter , younger one still growing up at 28 , works when he wants , comes home when all the pubs close. Wife things of her mum & sisters only. All of them have eyes on my money at the front , side and back. Cannot wait for me to fall. (1) my wife and I pay tax after expense on our individual properties , and split equal on others . We don't know if they are in tenant in common or jointly owned. I want all my assets to go to my children but problem (a) older one is capable and willing but what if he hits a problem in his marriage (2) younger son is not financial capable to large income and also may gat his Matromonial problem. (3) I think my wife will sign anything - all to me , if you advice so that I can do as per your advice to pass to children and mitigate IHT . Chances are I am going first . To conclude what tax advice to reduce income tax and IHT (2) How can I keep the wolf at bay - either it will go to my mother in law or to my children's mother in law. . I want to keep in my blood line but young son spends more time in pub with mothers family.

jay shah

9:31 AM, 15th June 2017
About 2 years ago

Please advise.


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