Transferring a Property to Ltd Co.

[dan0108]

I've asked lots of solicitors and accountants and to date none have been able to answer my question.
I’m transferring a property I own into a Ltd co. I’ve got the company set up and the ID forms.
My question though is – How to I protect the value? As in the value is £110k – do I ‘loan’ the company £110k and it then buys it off me? But in truth, I don’t want to take the loan money straight away but for it to be held until we need to sell it have actual money? That then minimises the tax as the fact I loaned the company £110k in the first place?
Maybe I'm not making sense - but once I transfer the asset I want have it any longer, the company will but it was mine in the first place. Therefore, I thought I could place a value as a director loan but not to be paid on transfer but at a later date. Is that normal, is it wrong, is it logical or madness?

I’m a bit confused and need to make sure I do the right thing, so any help will be gratefully received.

 

[Joyous]

As you and your company are connected counterparties the property is deemed to be transferred at market value - even if your company doesn't pay you a penny for it. Any stamp duty is added and the total will be it's balance sheet value.

There's no need for you to transfer funds but it will need to be an actual leagal transfer in terms of deeds of ownership etc.

Also worth noting that this will be a disposal for you so there are capital gains tax implications to consider.

Edit - forgot to add that the transfer will result in a healthy director's loan account balance that you can draw on when you're ready.

 

[dan0108]

As you and your company are connected counterparties the property is deemed to be transferred at market value - even if your company doesn't pay you a penny for it. Any stamp duty is added and the total will be it's balance sheet value.

There's no need for you to transfer funds but it will need to be an actual legal transfer in terms of deeds of ownership etc.

Also worth noting that this will be a disposal for you so there are capital gains tax implications to consider.

Edit - forgot to add that the transfer will result in a healthy director's loan account balance that you can draw on when you're ready.

Thanks Joy. Your advice has been brilliant.

 

[dan0108]

I think the main issue is how to manage this with Land Registry. As you only have a choice of a transfer for consideration or not. I want the company to owe me the debt. but if I say it's paid me on the TR1 form, then it'll no longer owe me, right or am I missing something again?
Thanks in advance.

 

[Bobbo]

I think the main issue is how to manage this with Land Registry. As you only have a choice of a transfer for consideration or not. I want the company to owe me the debt. but if I say it's paid me on the TR1 form, then it'll no longer owe me, right or am I missing something again?
Thanks in advance.

If you bought a house for £250,000 with a mortgage of £200,000 the TR1 form would still say consideration of 250,000 even though you personally hadn't actually parted with that sum of money.

Same applies here, company has agreed to buy house from you for 110,000 and it has taken a loan of 110,000 to do so - that loan just happens to also be from you.

Assume you have done your research and/or taken advice as to whether transferring this property into a company is a good idea.

 

[dan0108]

If you bought a house for £250,000 with a mortgage of £200,000 the TR1 form would still say consideration of 250,000 even though you personally hadn't actually parted with that sum of money.

Same applies here, company has agreed to buy house from you for 110,000 and it has taken a loan of 110,000 to do so - that loan just happens to also be from you.

Assume you have done your research and/or taken advice as to whether transferring this property into a company is a good idea.

Hi Bobbo, yep, it does make sense but thanks for asking.
I worried that it would seem I've been paid back then there isn't any director loan to be paid back......, no?

Although, it seems I'm a 3rd person to myself in this case.........