Tax free transfer of properties to company

Is property letting a business or a trading activity?

This is often a moot point, but following a recent tax tribunal decision (Elizabeth Moyne Ramsey v HMRC UKUT266) we now know that it is a business for the purposes of claiming CGT roll-over relief on incorporation of a property letting activity. That means no immediate tax charge on incorporation.

That could be very handy if it becomes a good idea to own a property letting portfolio within a limited company. The tribunal held that whether a business exists for this purpose should be interpreted broadly.

This ruling presents ideal opportunities for people who previously refrained from incorporating their property letting activities due to the capital gains tax that would have been payable at the time of transferring the properties into a limited company.

If you have a property letting business then now is the time to contact us to discuss your options. Our personal tax planning review will cover not just the immediate tax savings but will consider the longer-term implications of such action.

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