8:00 AM, 20th February 2020, About 2 years ago 9
Maybe I have over-complicated things in my head, so can anyone help me sleep easier, please?
Under the most popular s24-mitigation options, properties are transferred from personal ownership into a company structure, and HMRC now considers that the company now has “beneficial ownership” of the properties instead of the former individual(s). HMRC applies corporate taxation rules rather than personal taxation rules (and this should result in lower tax than would apply under s24).
However, the Land Registry still shows the individual(s) as legal owner(s) of the properties, and any mortgages on those properties would still be in the name(s) of the individual(s).
When it comes time to remortgaging any of them (e.g. end-of-term or better rates), the new mortgage will still need to be in the name(s) of the individual(s) because the security (the property) is still in their name(s).
My main concerns, however, are about how well protected are the assets? If the company were to become insolvent, would administrators be able to force the sale of those properties because HMRC considers the company to be the beneficial owner?
Or would the administrators not be able to touch the properties because they are still in the names of the individual(s)?
Likewise, if any of the individuals named on the Land Registry and the respective mortgage were to face insolvency, would those administrators be able to force the same of the properties, because of the individuals’ names still attached to them?
Or would the beneficial ownership status protect the properties from the actions against the individuals?
Presumably the treatment with regards to Inheritance Tax must be the “beneficial ownership” route, as this is still within the HMRC remit.
But what about the actual inheritance angle? Would the actual properties be part of the probate process? Or just the shares in the company that now enjoys beneficial ownership?
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