Transferring Property from a Company and tax issues?

by Readers Question

4 years ago

Transferring Property from a Company and tax issues?

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Transferring Property from a Company and tax issues?

We are looking at mortgaging an investment property we bought towards the end of last year via our Limited Company. However, as most will be aware, there are few mortgage deals available for Limited Companies, and attract large fees and high interest rates – more so as this is our first BTL.

Previously, we loaned £100k to our business, with re-payment due within 30 days of a written notice of demand – the loan was also secured against the property.

I wondered if there would be any tax implications (both for ourselves as well as our company) if we were to transfer the property from our company back to ourselves as repayment of the loan? There would be no stamp duty payable as the value of the property is below that of the current threshold.

As we have just finished the re-furb of the property, we plan to rent it out, and then apply personally for a BTL mortgage once the six months ownership time period is over.

Any thoughts would be much appreciated.

Many thanks

Squibaccounting



Comments

Neil Patterson

4 years ago

Hi Squib,

My first obvious question is why are your accountants not all over this and why was there no plan in place before you started?

Great accountants that understand company accounts, business and importantly property investment are vital in your circumstances.

The answer to your question will be complicated and very dependent on your and the companies individual circumstances, so you should not act on specific advice from anyone other than a fully qualified and insured accountant.

I very much recommend you speak to our accountants.

Please see >> http://www.property118.com/member/?id=452

and >> http://www.property118.com/landlord-tax/

james pearce

4 years ago

Interesting.......
We've been wondering the opposite.
We have over the last 7 years built up a p/f of five properties and are starting to worry about CGT and it's on my list to investigate further at some point and I was wondering whether transferring in to a ltd company and trying to get one big loan for the lot would be a good way forward.

David Atkins

4 years ago

Reply to the comment left by "james pearce" at "28/01/2015 - 11:12":

Hi James - I'm in the same position as you and wondered if taking dividends from a company would be more tax efficient, but my financial advisor advised against this. He said that mortgages for companies are very expensive and hard to get old of. It gives the mortgage lender licence to rip you off.


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