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  • Tax

    Transferring land to a LTD company

    Hi all

    I'm looking for some advice in respect of transferring land into a LTD company to minimise my tax exposure when developing the land.

    The land is currently part of one of my rental properties (which is in my personal name).  However, I want to transfer part of the garden which now has planning permission to be developed,  into a Development company owned by my dad and I.  I've had the land valued by several agents and have this well documented, I've also spoken to an accountant about the transfer.

    My problem is, when I speak to the solicitor about transferring the land from my name to the LTD co. they're not happy to do this as a paper exercise and allow the value of the land to sit in my Director's Loan account. They are asking for the funds to be transferred through their Client Account, which I am not in a position to do currently - can anyone tell me if this is correct or can this be simply a paper exercise?

    If anyone has previously done a similar transaction and would be happy to recommend the solicitor they used, it would be much appreciated.

    Many thanks

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    Yes I've done the same both myself and for clients. Solicitors always ask but I've yet to see them insist on cash payments. I would tell them the lay of the land or change them.

    it could be a lender condition in which case your broker should have liaised with them upfront to have this condition waived.

    This should be the least complex part of your transaction.

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    Chartered Accountant, Tax Advisor and Mortgage broker

    (and BTL portfolio owner)

    stuart@johnsonsca.com

    02039077022


    Hi Stuart

    Thanks for your reply.  I agree with you that this should be a simple transaction.  The property is mortgage free so it should be a simple transaction, however the solicitor is making it difficult.  I think I'll need to find another and go from there!

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    Has the solicitor prepared all the paperwork and split the property into 2 parts at the LR? If so, pay him and get copies of everything. Sign the contract with witnesses with a completion date in a few days time. Scrape together as big a lump sum of cash as you can and then transfer this to the company as a loan. Use the money to pay for a portion of the land. Repeat the 2 transfers as often as required to pay for the land fully - you can do all of this in a few days as you will be able to make multiple transfers within your faster payments limit. Submit your transfer deed to the LR. Submit your SDLT return.

    It is no longer a paper exercise as the money has moved between the accounts.

    My company bought a house from my parents and we did all our own conveyancing as we trusted each other. My parents lent me some of the money used to buy the house and we did a similar set of transactions through 3 accounts over a few days (FP limits were 10K/day at the time rather than the 100K they are now).

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