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Hi Marie,Is it £17K by any chance? I would recommend that you contact your lender and ask if they approve of a structure of this nature.This video may shed some light:
Vanessa Warwick Landlord and Co-Founder of PropertyTribes.com **If you have got value from Property Tribes, find out how you can support it in remaining a free to use community resource**
For some reason I could only see your post up the fees will be....
I was thinking of something similar. My accounts wanted to charge me £3k just for setting up the partnership even before the cost of transferring properties. There's one company that charge £400 up front consultation and then £250 per property.
Did they say if CGT, stamp duty or remortgageing would be required?
It's all quite complicated but I think he said that there would be a little CGT but that it is within the allowable (or something) so we wouldn't actually physically pay anything and that if we can prove we've been a partnership for 3 years there wouldn't be and stamp duty to pay.I think he said that you don't necessarily have to transfer the mortgages to the LLP and that they could be held in "Deed of Trust"?
A beneficial interest company trust then.
Director of Tax Peplows Limited
CTA ACA FCCA
I have no idea, sorry. we're new to all this.
I currently have 4 properties in joint names with my wife. Would this be suitable for me, if so what would the costs be?
Two of the mortgages are with "Northern Rock" on cheap base rate trackers. If I were to ask for any permission or modifications they would push me to remortgage with another provider at much less favourable terms.
We don't get involved in Beneficial Interest Company Trusts. Sorry
Hi Debbie,Do you mind me asking why you don't get involved in BICTs?
Don't mind at all, in my humble opinion they don't work and are fraught with issues when you need to refinance. We decided not to get involved with them or the hybrid structure.
Thanks for clarification Debbie.I just found this article from the Telegraph:Popular buy-to-let tax loophole 'won't work', accountants warnExperts warn that landlords (using BICTs) could fall foul of tax avoidance laws as well as leaving themselves open to allegations of "mortgage fraud".Nimesh Shah, of accountant Blick Rothenberg, warned of "huge pitfalls".
He said the main issue from a tax perspective is a section of the Income Tax Act which prevents individuals from transferring an income stream into a company for tax reasons.
Mr Shah said HMRC would be looking for any sign that this was an artificial structure or tax-motivated manoeuvre.
He said: "The test is to do with why you're incorporating. Is there a commercial rationale, or is it a tax reason?
"In a normal incorporation situation everything is going in to the company. Here you're splitting the income and the ownership out, which makes it more of an issue," he said.Jeremy Raj, of law firm Wedlake Bell, said: "If you're not careful you are leaving yourself open to being accused of committing mortgage fraud. If there's any major change in the ownership of a company then the lender is entitled to know."On a separate issue, Mr Shah also said that property owners need to be careful with the section of the stamp duty law which apparently allows a partnership to avoid stamp duty on incorporation.
There is no set test, but the Revenue can remove the relief if it believes that the partnership has been established specifically for the purposes of avoiding the stamp duty charge.