Reply to: Selling own home to ltd co

[garnet]

So that's the basis of all your tax evading advice over the last week... Do it because of HMRC's inability to catch you and deal with it.. Proper smart that is. You are going to see a lot more BS on this board if that's your view. What a moron.

The only moron on this board is YOU. Period!
However I don't want to go into confrontation.
HMRS may catch you for anything basically. Proving they are right is a completely different thing. If you weren't like you are you'd know that.

[northernladuk]

Nothing, except hmrc's inability to prove this (or any other legal doing which reduces tax) in court.

So that's the basis of all your tax evading advice over the last week... Do it because of HMRC's inability to catch you and deal with it.. Proper smart that is. You are going to see a lot more BS on this board if that's your view. What a moron.

[Alan @ BroomeAffinity]

Nothing, except hmrc's inability to prove this (or any other legal doing which reduces tax) in court.

By which rationale you'd also shoplift if you knew the shop assistant was in the back room and the cctv was busted? No chance of getting caught, let's fill up on pasties and maltesers.

[garnet]

...........What could possibly go wrong?

Nothing, except hmrc's inability to prove this (or any other legal doing which reduces tax) in court.

[Alan @ BroomeAffinity]

BS, BS, sorry I am allergic to BS!

Do you always try to pay the biggest possible amount of tax? Seems so to me.
We are not stupid are we?

There's a huge difference between not paying the highest possible amount of tax and being deliberately dishonest in avoiding tax. Lying by omission is still lying. Which means it's fraud. But if that's what you want to do, knock yourself out. What could possibly go wrong?

[garnet]

He would then be commiting fraud or tax evasion or both.

BS, BS, sorry I am allergic to BS!

Do you always try to pay the biggest possible amount of tax? Seems so to me.
We are not stupid are we?

[Smartie]

True story

A relative of mine bought their house from her maj.

The bloke selling it forgot to mention that it belonged to his company, which had gone bust.
The usual searches turned this up and the property was then purchased from the crown.

True story.

[john@UKCA]

ChimpMaster - CGT will be 0 when I sell the house to the ltd, because I live in it ever since I bought it.

Do you have any reference where this is stated? It would be very useful.

The connected party rules for stamp duty applies where you are transferring property to limited company at under value.

The 3% stamp duty hike only applies if you personally own more than one property at the end of the transaction day when you purchase a property.

There are exceptions to this rule for replacing your main residence.

[northernladuk]

Why?
That's specifically why I mentioned Foxtons. An established, professional (ok, Foxtons) company whose job it is to provide realistic estimates on the value of a property.
He doesn't go out of his way to point out the cracks in the wall, or that leaky tap (like he wouldn't if selling normally). Then uses the independent estimate as his sales value.

Then when his company comes to sell the house they're at the mercy of the rest of the market. Might get lucky - great, you've got to pay tax on more profit. He might be unlucky.

Because you are well aware the figures are not accurate and are manipulating them to gain a tax advantage.

Your last line kinda destroys your own point so back to letting the thread die nice and quietly.

[deeh]

He would then be commiting fraud or tax evasion or both.

Why?
That's specifically why I mentioned Foxtons. An established, professional (ok, Foxtons) company whose job it is to provide realistic estimates on the value of a property.
He doesn't go out of his way to point out the cracks in the wall, or that leaky tap (like he wouldn't if selling normally). Then uses the independent estimate as his sales value.

And, if anyone ever looked into the sale price, surely having above estimate would be better than than 'That's what Zoopla said it was at the time' based on the algorithm of the day.

Then when his company comes to sell the house they're at the mercy of the rest of the market. Might get lucky - great, you've got to pay tax on more profit. He might be unlucky.

[northernladuk]

Dredging the thread I know, but

What if he went to Foxtons and obtained a hugely optimistic valuation, then based the purchase price on that. Independent valuation = fair price?
At the point his company sold the property they might find that the taxable profits aren't as large as they might have been with a more realistic original valuation.

He would then be commiting fraud or tax evasion or both.

[deeh]

Any profit made when your company re-sells the property will be liable for corporation tax.

Dredging the thread I know, but

What if he went to Foxtons and obtained a hugely optimistic valuation, then based the purchase price on that. Independent valuation = fair price?
At the point his company sold the property they might find that the taxable profits aren't as large as they might have been with a more realistic original valuation.

[fidot]

Any profit made when your company re-sells the property will be liable for corporation tax.

[TheFaQQer]

TheFaQQer - HMRC might come calling, but I work with the assumption that. I have my accounts and all affairs clean, hence, not worried on that either. Unless if this house purchase would be seen as foul play by HMRC.

I'm sure Jon Bessell thought much the same, but if you're certain then it's not at risk then good luck.

[georgeg]

Hello,

Thank you all for your input so far.

I've been very busy with work and didn't have a chance to catch up on this.

The "old" property is currently my main home, however I intend to move on to a new one, and the "old" one will be rented until the right moment to sell on. That is the point where I was thinking of leveraging ER.

For litigation I have PI, however liability clause on every contract is up to the value of the signed contract so, not too worried about that.

TheFaQQer - HMRC might come calling, but I work with the assumption that. I have my accounts and all affairs clean, hence, not worried on that either. Unless if this house purchase would be seen as foul play by HMRC.

borderreiver - The whole idea of selling the house to the company is to allow me to mobilize the ltd cash reserves for the purchase of a new personal home. The existing "old" house was always destined for sale. It will be sold again by the company in the near future, when the right opportunity turns up. You could see that as protecting the company reserves (assuming that the house prices continue to trend upwards, beating inflation, while the house is owned by the ltd).

ChimpMaster - CGT will be 0 when I sell the house to the ltd, because I live in it ever since I bought it.

If I remember correctly, your Ltd Co and you are not seen as different when it comes to the additional stamp duty.

Do you have any reference where this is stated? It would be very useful.

Thanks again,
George