SDLT and Ltd company

[Maxwell83]

If I am sole shareholder in a ltd company that owns a house (rented to tenants), is that house 'used against me' for the purpose of calculating SDLT (the 3% surcharge on second homes)? i.e. Is that house still classed as 'my' house?

One broker believes it is, and said that in a previous case it was used against the purchaser because he had given a personal guarantee on the mortgage via the ltd company. I don't know how correct that decision was.

In my case the house is owned by the ltd company mortgage free, but it wouldn't be crazy to think HMRC would still view this as 'my' house would it? The ltd co is a separate entity, but I own the entity that owns the house!

I haven't found a house yet, so haven't appointed a solicitor yet, so can't ask them. And in fact the answer could influence whether/what I am going to buy. So I can't ask the solicitor until I am further down the process of buying, but can't get further down the process until I have an answer to the question!

Hoping someone here has been through this already and can relay their experience.

Cheers

 

[arnydnxluk]

Yes I believe property owned by a limited company of which you control is counted when it comes to the additional stamp duty. Otherwise you could just start a new company for each property.

 

[Financial-Modeller]

My guess (so not advice) would be that company buying a property is not subject to extra SDLT, unless HMRC have specific rules for companies where 100% of shares are owned by one individual shareholder.

If the purchase is critical on this relatively minor cost relative to the value of the asset and rental income over the ownership of it, its probably better not to make it.

Also, have you considered buying property indirectly via property funds or REITs? No property management to deal with, diversification across asset classes and geography, 90% of rental income delivered as dividends, no SDLT, and if held in a ISA or SIPP, exposure to property assets can be enjoyed tax-free!

 

[US_US_Taxes]

Your company is a separate entity from you. No 3% SDLT should be chargeable If a limited company owns a property but you do not. I had this argument with my solicitor and had to point to the right part of the legislation.