Stamp Duty with Limited Company

S

Sudhir London

New Member
Hi, I used to live in Berkshire but two years ago I moved to a new property in London. Naturally I paid the 3% stamp duty surcharge in 2018 on buying the new London home. My plan this year was to sell my old property which is now a BTL so that I could reclaim the 3% stamp duty surcharge that I paid in 2018 on the new London home. However, due to the current circumstances, I doubt I can sell it for a decent price. Therefore, I am thinking of selling the old property to a limited company that I will create. Hence, I should still be able to avail of the 3% stamp duty surcharge refund. Can anyone verify if that strategy makes sense.

I am portfolio BTL investor. I will be creating a brand new limited company to purchase my Berkshire property. Will my company have to pay the higher rate stamp duty which includes the 3% surcharge?

As a typical higher rate tax payer, I can offset 28% of the stamp duty as a capital expense of the CGT when selling the property. Can someone tell me how a limited company can reduce the burden of the stamp duty by offsetting as an expense.
 
Last edited:
Tony Gimple

Tony Gimple

New Member
Forum Partner
Hi Sudhir,

Who was it said that progress is mans ability to complicate simplicity; which is certainly true when it comes to otherwise transactional taxes such as SDLT .

The bigger question though is why, as a portfolio landlord and higher rate tax payer, you've opted for the limited company route in the first place which may not necessarily be the best overall solution for you.

Always happy to have a more detailed chat to get behind the headlines.

Stay healthy and have a good weekend.
 
S

Sudhir London

New Member
Hi Tony,
Thanks for your response and yes, I am keen to have a chat to talk more. You are right that I am a higher rate tax payer and a portfolio landlord. My motivation of transferring my old property in Berkshire to a limited company is so that I can reclaim the 3% SDLT surcharge on my new London home. Secondly, I will then be able to only pay corporation tax at 19% as opposed to income tax at 40% on my rental income. Finally, I will still be able to avail of the mortgage interest relief.

I was also hoping to sell another one of my BTL properties to my limited company, although this time I will deliberately sell it for £70,000 loss. This should reflect the market value by next year, Hence, I will have a £70k capital loss that I can use to offset the CGT when I want to sell another property years from now when the market recovers.
 
NewOrleansHomeBuyer

NewOrleansHomeBuyer

New Orleans Property Investor
I forgot how much I hate Stamp Duty, it is such an inefficient tax as it is a disincentive to transact. I used to invest in Australia and had to pay this but now I invest in USA and instead we pay yearly taxes. It allows you to buy and sell properties much more freely.
 
Top