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If the properties are in your sole name then incorporation relief is a no no
If you are a partnership then all the properties owned by the parnership must be transferred and at the same time
If you own property jointly with your wife then that is in fact a partnership
In that case unless your question is purely hypothetical then its time to consult accountants experienced in incorporation relief S162..
Best to avoid snake oil salesmen flogging altrnative schemes
Sorry don frump is not completely right here.
Incorporation relief is based on you having a business and transferring all assets of that business (other than cash) to the new company.
The reason that don has said incorporation relief is a no no for you as an individual is due to stamp duty land tax I suspect. That's a different question and of course may not apply depending on property values (although I suspect with so many properties it will apply). Don is implying using a partnership to obtain relief from SDLT. If you are a partnership then fine but a husband and wife combination as you describe it is not automatically a partnership - or at least is open to challenge (after the event). HMRC tend to not view H+W property ownership as a partnership and whilst we could debate this all day the courts have generally looked at the amount of work done by the partners. I don't necessarily agree with all the detail of the court cases but the point remains that if you are a silent partner then it is far harder to demonstrate that you are in business as a partner. The Ramsay case is often cited on the various requirements meet partnership requirements.
HMRC are now wanting to see partnership tax returns produced and whilst as a matter of fact this is not relevant as to whether this is a partnership it certainly helps. I prefer to avoid having an argument with HMRC if it can be avoided.
You will also hear about a three year rule which is about extracting whether you can extract the implicit gain tax free.
Don is however right that you should take advice. This is a complex tax matter and as it deal with capital values the cost of getting it wrong is usually very high.
Chartered Accountant, Tax Advisor and Mortgage broker
(and BTL portfolio owner)
many thanks for all your great advice.
re 'Incorporation relief is based on you having a business and transferring all assets of that business (other than cash) to the new company.'
If this is done from personal ownership via a partnership as the initial step, presumably the rentals need to be transferred into the partnership, thus incurring SDLT etc?
Not necessarily. It depends on the type of partnership. This is an example of why you should take advice.
thanks. normal husband and wife partnership where both heavily involved.