PLC and stamp duty

by Readers Question

9:37 AM, 11th March 2016
About 3 years ago

PLC and stamp duty

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PLC and stamp duty

We have a PLC in which we bought land, developed it into a camp site and now run it. We jointly own our residence. PLC and stamp duty

I want to buy a property for investment. A new build for rent. Is the extra 3% stamp duty a tax deductible cost?

And, as a PLC can we claim interest payment relief as well, or must we own more than 15 properties?

I have been looking through the achieves so sorry in advance if I missed the answer.

Many thanks

Gabriel



Comments

Mark Alexander

9:43 AM, 11th March 2016
About 3 years ago

Hi Gabriel

We will not know the detail of the new SDLT rules until after the Budget on 16th March but my current understanding of what is proposed will mean that your PLC will be subjected to the additional 3% stamp duty.

PLC's (and limited companies) are not affected by section 24 of the 2015 finance act which means that you will be able to claim tax relief on finance costs. The 15 property rule has nothing to do with restrictions on finance cost relief, it has been a discussion point in respect of SDLT.

With regards to raising finance in your trading PLC to purchase BTL property your options will be extremely limited. This is because most lenders who offer BTL mortgages to companies insist that the company is a special purpose vehicle "SPV" and has no other trading activity.
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Mike W

11:11 AM, 11th March 2016
About 3 years ago

Mark,
Can you advise who is willing to provide loans to companies which wish to buy property to let out in Scotland and which are HMOs. In Scotland a new built family house with 4 bedrooms let to 4 unrelated students is by definition an HMO.

Gabriel Hutchings

11:36 AM, 11th March 2016
About 3 years ago

Thanks Mark,

What you say is as expected, interest payments deductible. Extra 3% stamp duty to pay and presumably is also deductible?

(I don't know why I wrote 'PLC' as you spotted I meant Limited Company.)

Enjoy Malta

Mark Alexander

12:05 PM, 11th March 2016
About 3 years ago

SDLT can NOT be deducted as an expense against rental profits but it can be added to the purchase cost in order to reduce CGT when the property is sold.
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Mark Alexander

12:06 PM, 11th March 2016
About 3 years ago

You would need to speak to a practising mortgage broker about that.

Go to our "Members" section and do a search for Howard Reuben. He has a contact form on his many profile. Whilst he is based in Colchester I know for sure he has several clients in Scotland.
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