Avoiding SDLT - any tax gurus on here?

[foliedouce]

Any tax gurus on here?

Scenario

Own a house mortgage free, want to buy another house for cash whilst retaining ownership of the original house

This then triggers the additional home SDLT Stamp Duty

However, the original house can be transferred / sold into an existing BTL Ltd company to avoid this (paying stamp on the orginal lower value house)

Seller of the new house wants to exchange immediately, but happy to complete at any date in the future

Can we exchange immediately without triggering the additional home SDLT as long as the original house is within the Ltd company before completion?

OR do we have to wait until the existing house is in the Ltd before exchange?

Many thanks

[TownIdiot]

Sale of the original house to your ltd company would be subject to SDLT, so can't see that would help.
And you'd then have to either pay rent to live there (or tax on the benefit of not paying tax)
And any future gain on the first house would be taxed

SDLT would be calculated at completion.

Edited by TownIdiot on Thursday 7th November 18:04

[foliedouce]

Thanks, I understand that and happy to pay stamp on the sale of the first home to the BTL Ltd co..

I'm trying to avoid the additional home SDLT charge on the new place.

I'm asking if I can avoid that by doing the transfer of the existing house between exchange and completion on the new place

[TownIdiot]

foliedouce said:

Thanks, I understand that and happy to pay stamp on the sale of the first home to the BTL Ltd co..

I'm trying to avoid the additional home SDLT charge on the new place.

I'm asking if I can avoid that by doing the transfer of the existing house between exchange and completion on the new place

Sorry I edited my post as you were replying. SDLT due on completion.

Remember it's not just SDLT that is the issue with this.

[foliedouce]

Thank you, that's what I thought / hoped

[AyBee]

I doubt there's a really easy loophole - they weren't born yesterday,

[TownIdiot]

AyBee said:

I doubt there's a really easy loophole - they weren't born yesterday,

The ltd company still pays the extra stamp duty, just on a different amount.
And extra taxes due as well.

[Puzzles]

Yeah they still get a decent bite

[Cheib]

TownIdiot said:

foliedouce said:

Thanks, I understand that and happy to pay stamp on the sale of the first home to the BTL Ltd co..

I'm trying to avoid the additional home SDLT charge on the new place.

I'm asking if I can avoid that by doing the transfer of the existing house between exchange and completion on the new place

Sorry I edited my post as you were replying. SDLT due on completion.

Remember it's not just SDLT that is the issue with this.

Paid on completion but it is “calculated” on the day of exchange.

We sold our old house to a developer on an extended completion, exchange date was the one that was relevant for the refund of second home SDLT.

[TownIdiot]

Cheib said:

Paid on completion but it is “calculated” on the day of exchange.

.

I am really not sure this is correct

[foliedouce]

I called HMRC SDLT helpline this morning and they confirmed it's calculated on completion, not exchange

[Neptune188]

Smiliar (ish) SDLT Question.

Am hoping to buy a new place (offer accepted, wheels turning etc). Ex wife is buying me out of my old house.

Buy out won't have been completed on property 1 when property 2 will (hopefully) be purchased.

In theory I become liable for 2nd home SDLT; in practice I know it can be reclaimed but is there any grace period if a transaction is in progress?

I can stomach the extra (on the basis it can be reclaimed) but i'd rather not if I can avoid it.

[TownIdiot]

There is a possibility of an exemption for couples who have reached a formal settlement during divorce

Definitely worth exploring.

[Cheib]

TownIdiot said:

Cheib said:

Paid on completion but it is “calculated” on the day of exchange.

.

I am really not sure this is correct

I’ll check it was a long and protracted sale which I would rather forget if I am honest ! I could well be wrong.