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Looking t understand if property held in TRADING LTD CO can be transferred to lettings specific SPV LTD CO and options for making such a transfer.
Property was purchased cash within trading co to refurb/sell but desire now is to hold long term within letting specific SPV and secure mortgage to release funds. Property and both companies registered in Scotland.
Any advice or experience having done this would be appreciated.
So many things to consider here.
Any tax advice would need to factor in long-term intentions for both entities.
You need professional advice.
I have my company structure set up as a group so later when the mortgages are fully paid, the assets can be moved into a single company without triggering SDLT or CGT.
The Parent Ltd Co needs to hold 75% or more shares of the child companies, then the assets can be moved between the companies.
In your case the I would imagine the trading Ltd co would be the parent company, register a new non-trading company with your existing trading company as the 100% shareholder. Then transfer the asset from the trading co to the non-trading co. I believe the trading company will need to remain the 100% share holder for a number of years ( maybe 3 ).
This is my initial response just going off what I know about my situation and to show you it maybe possible. But either do thorough digging around yourself, then qualify your solution with HMRC, or employ a tax specialist.
Thanks Sean and Arran,
I appreciate there are number of factors to consider and that professional advice will be required. Was really just looking to understand basic premise of such a transfer being possible.
I should have added in my original post that the value of the property would be below the threshold for stamp duty (or LBTT as is the case now for Scotland) so not concerned about that aspect but would likely cause the 3% ADS (additional dwelling supplement) to be triggered.
As I understand if the SPV was to be majority or owned in full by the parent co (as suggested) then securing a BTL mortgage on the property once held in the SPV may be more challenging, limited products, etc.
The desired outcome is to ensure a BTL mortgage can be secured (with the least complexities) on the property once held within the SPV, mortgage funds would then support extending a BTL portfolio within the SPV.