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  • Tax

    Schedule 15 Finance Act 2003 re: SDLT

    I have met a Tax Advisor from Facebook and he has given me some info which I would like an opinion on

    I am at present doing what I call the Landlord Shuffle selling personal owned BTL Mortgaged property into my company

    The Gentleman who I met has advised that I can save Stamp duty by using the Section 15 of the Finance act

    It allows a Wife and Wife to form a partnership and this will exempt Stamp Duty being payable

    The Mortgages on the property are not effected in any way they will stay in my name

    It sounds really good but what do others think Have you been advised on this will it work

    Regards DL

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    Learn Change and Adapt ?????

    All comments are for casual information purposes only. If you wish to rely on any advice I have given please ensure you obtain independent specialist advice from a third party. No liability is accepted for comments made.

    If this works you will have made my day

    thanks DL

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    Learn Change and Adapt ?????

    All comments are for casual information purposes only. If you wish to rely on any advice I have given please ensure you obtain independent specialist advice from a third party. No liability is accepted for comments made.

    It's possible - had a few clients use this. Some T&C to meet criteria, not a simple process and I'd certainly prefer a confirmation from Hmrc that all is cosher.


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    _________________________________________________________________________


    The above post is not financial advice, its often me rambling - passing time on a coffee break.
    If you are looking for the Best BTL Mortgage? Call the Specialist Team at Bespoke Finance.


    _________________________________________________________________________


    I agree I take the view if its too good to be true it normally is Adam

    But if it works happy days

    Have any of your clients used this route and did it work ?

    I am open minded with this sort of thing ??

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    Learn Change and Adapt ?????

    All comments are for casual information purposes only. If you wish to rely on any advice I have given please ensure you obtain independent specialist advice from a third party. No liability is accepted for comments made.

    Thanks Adam.

    Yes there is criteria to be met. However, I must say in my opinion the process for claiming the relief is simple.

    Also, it's not possible to obtain clearance from HMRC ahead of the transaction that "all is cosher". HMRC are not required to give statutory clearance on this and do not provide non-statutory clearance either.

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    This relies on the fact that transfers between Spouses are tax neutral, meaning their are no CGT or income tax implications.  The general rule is that there is also an exemption for SDLT.  However where the property is subject to a mortgage then the mortgage being transferred to the spouse is subject to SDLT.  This may not therefore give the result on creating a partnership which is desired. 

    In addition to this you also need to get HMRC's agreement that a partnership in connection with the property ownership exists.  HMRC's general rule is that where property is owned by two or more individuals then they each own and are responsible for reporting on a tax return their own portion of the property income and expenses.  This does not mean that a partnership exists.  For a partnership to be proven you need to complete and submit a partnership tax return.  Lastly the partnership must exist for more than 12 months before the transfer to a company otherwise HMRC may decide that the Partnership was never intended to be a true partnership and was simply an avoidance measure.

    Regards Nigel

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    Nigel Reynolds FCCA CMgr FCMI

    Property Tax Specialist

    Reynolds and Co

    http://www.reynoldsandco.co.uk


    Nigel - it doesn't rely on the fact that transfers between spouses are tax neutral. This could be achieved where the two partners are not married or related. 

    You are correct in that you would want to have a partnership return submitted and a partnership UTR, however the time period to run the partnership is open for debate.

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    from what I understand there is no transaction between spouses its a paper agreement and then when a property is sold to a ltd co no stamp duty is payable

    I know what your saying is my thoughts 100%

    But the Tax advisor who I will be meetings says this is not the case

    The property stays with the spouse and nothing changes other than a partnership agreement

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    Learn Change and Adapt ?????

    All comments are for casual information purposes only. If you wish to rely on any advice I have given please ensure you obtain independent specialist advice from a third party. No liability is accepted for comments made.


    https://www.taxadvisermagazine.com/artic...plex-rules

    Industry magazine for Chartered Tax Advisors

    See "Partnership to connected company" section.

    Author is a Manager at KPMG - one of the Big 4 accountancy firms.

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