Some tax advice please

[HomesWarehouse]

looking to purchase a block of 10 flats, 500k, 100k gifted deposit, (from current owner) will be funding the rest with personal funds (25k extra for deposit and CGT if applicable)

current rental income 51k

the property is owned by a Ltd company, so can I save on CGT by purchasing the shares rather than buying the property from the company>??

also I am already close to the higher rate of tax from my salary, so would it be a better option to purchase the property under another company owned by myself.?

I am an experienced landlord and currently own 7 BTL's but not experienced in CGT as most of my properties are below the threshold or have been owned since before it changed.

 

[STDFR33]

CGT will not apply on the purchase.

 

[HomesWarehouse]

thanks for the response Accountancy lab, can you explain, will it not apply if I buy the company shares? or not apply if I use a company to buy the property,?

 

[STDFR33]

Because CGT is a tax on disposals, not acquisitions.
Other taxes will come into play however.

 

[HomesWarehouse]

Greatest apologies but just realised my question was related to STAMP DUTY not CGT, will amend original post,

Because CGT is a tax on disposals, not acquisitions.
Other taxes will come into play however.

 

[The Byre]

Given the sums involved, you really need a specialist accountant to set up the right structure for you.

 

[HomesWarehouse]

Given the sums involved, you really need a specialist accountant to set up the right structure for you.

I have an accountant that I will speak to but was looking for opinions, as I wouldn't like to go in clueless really

 

[STDFR33]

Greatest apologies but just realised my question was related to STAMP DUTY not CGT, will amend original post,

If I replace 'CGT' with 'stamp duty', your question makes no sense at all.

You are best writing down all your thoughts and putting down your misunderstandings to your accountant.
There's too much as stake here.

 

[The Byre]

The only way you can avoid SD is to have a property rented back to a UK rental and admin company and the property owned by a UK company, that, itself is owned by a foreign company in a jurisdiction where a change of ownership does not attract any taxes. As transfer of properties to such a company would today be liable to SD, there is no way to avoid SD on the first sale. Setting up such a structure is complex and may, under certain circumstances, not be lawful, so deeply competent advice is required.

I wouldn't like to go in clueless really

I am an experienced landlord

If I replace 'CGT' with 'stamp duty', your question makes no sense at all.

As @The Accountancy Lab said, write it all down and get some clarity into your thoughts.

 

[MikeJ]

Where can you buy a flat for £50k?

 

[alja]

Sorry if I missed something obvious. If you have the personal funds then whats the need for the deposit?

 

[HomesWarehouse]

The transaction I had in mind was to purchase the shares of the company that owns the property, therefore not purchasing property but purchasing a company making Stamp Duty no longer applicable,

 

[Newchodge]

But someone or some company has to make the purchase, making stamp duty payable by someone or some company.

 

[HomesWarehouse]

I was under the impression that the property would stay under the same ownership of the original company?? The purchase would be of shares in a company. Not property

 

[STDFR33]

Stamp Duty is applicable when you purchase shares.

 

[HomesWarehouse]

Great. Thanks for the info

 

[SteveHa]

However, shares don't attract the 3% SDLT surcharge that 2nd residential properties do.

 

[HomesWarehouse]

thanks for all the info guys, im getting there with the info now and will hopefully be proceeding soon with the purchase