Updating post from Reddit.
Hello,
I currently have a BTL and residential. I want the residential to become a BTL but I’ll have to pay higher stamp duty on my new residential which will cost a bomb. Is there anyway I can work this so I can pay the higher rate on the current residential to BTL ( Limited company @7k SD) instead of the new residential which will cost (22k SD)
Cheers
No, your going to pay the SDLT regardless..
I bought a new home in 2024 for £900k, we rented out the old home privately for 2 years.
As we kept the old home the SDLT on the new property was £59k at the higher rate.
I waited two years before moving the old home worth £576k to a LTD, we completed the sale in July. The stamp duty on the selling the property to the LTD was £47.k at the BTL rate which is same at the higher rate.
Because I sold the old home to the LTD under 3 years of buying the new home I claimed a refund on the now home's higher rate stamp duty and received £29k about 10 days ago
That is the best you can do in terms of reducing SDLT.
Incredible, that’s what I was looking for. So just to clarify, I purchase the new property and pay the higher LT, and can then sell the old resi/BTL to the LTD and claim back the higher SD on the new resi?
yes.
While I had planned all this I will admit I was nervous that HMRC would reject my refund request, especially as my LTD has my name in the title but it went through without a hitch.
I got some mixed messages on this sub about whether I would eligible.
In theory you have up to 3 years to dispose of your old property and claim the refund, I waited 2 years for the fixed rate on my new home. so I could use some equity release from my old home to reduce my personal mortgage.
I wish these things were more black and white instead of us having to try and hope! I’ve been thinking about different scenarios/workarounds for a while and your method makes sense, though I can see why the nerves were out!
I also did this.
Bought a house at 650k and paid an extra 20 something k in stamp duty.
Sold the initial property (a flat) for 250k and paid the extra 12.5k 2 years later into a ltd company that I am the sole director of.
Claimed the original extra stamp duty back and paid within 10 days.
It worked out that legal fees were around 3.5k, maybe 5k expenses all in on top of the stamp duty cost.
Edit - if interested dm me and I'll send full costs through.
Just thinking of an alternative option that would avoid having to pay the higher stamp duty and then have to reclaim it. If I was to transfer my current resi to a LTD/BTL so I had no resi, could I then purchase a new resi property, paying the standard rate? Isn’t this in affect the same?
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I have 40k in the bank so was thinking of selling my current resi (200k market value ) to my new LTD, ( 9k stamp duty) then purchase a resi at 400k and pay the standard 10.5k stamp duty, saving 10k.
I’m sure I read somewhere that if you if you buy a second property you pay higher stamp duty, despite it being in a LTD? Thank you for your help btw.
A Ltd is separate legal entity. Once it owns a property you do not. It the benefit of limited liability.
But, If you take out a mortgage you will be asked to take out a personal guarantee so you can’t dump the mortgage debt on the Ltd and walk away.
So your plan works
Thank you, that’s helpful
> I currently have a BTL and residential. I want the residential to become a BTL but I’ll have to pay higher stamp duty on my new residential which will cost a bomb.
Correct.
> Is there anyway I can work this so I can pay the higher rate on the current residential to BTL ( Limited company @7k SD) instead of the new residential which will cost (22k SD)
The only “land transaction” for the purposes of the Finance Act 2003 in this scenario is the new purchase and that is chargeable to SDLT at the higher rate.
As a "just so you know" and for planning purposes. If you SOLD your current home to say a LTD Company. You would then pay the normal rate of SDLT on your new home, great? Yes, but you would pay Additional Rate of SDLT on the BTL purchase into the company - so not so much. However, some people do it as they were wanted to move it into a company anyway.
> Let-to-Buy
Let-to-Buy used to be massive but the new tax scheme certainly disadvantages people retaning properties when they move up the property ladder.
Thank you for this.
Can't make sense of your post sorry!
Do you want to buy a new home for yourself to live in? Do you currently have two BTLs or one BTL and one home you own? Is the BTL owned by yourself or a Ltd company?
Sorry that made no sense!
I currently have a residential and BTL in my personal name. I want to purchase a new residential to live in and convert my current resi to an additional BTL. Want to see if I can avoid paying higher stamp duty on the new resi by paying it on the new BTL instead.
You won't pay additional stamp duty if you're replacing your main residency if you sell your home to your BTL company. If it's after you can claim it back as long as its within the 36 months
Info here: https://www.gov.uk/stamp-duty-land-tax/residential-property-rates
Just thought of another issue: if I sell it to my LTD company, won’t I have to pay capital gains on it?
Hi all, I’ve just come across something that I can’t comprehend in regard to the above discussions.
“If the property is your main residence and you transfer it to a limited company before buying a new home, the 3% additional SDLT surcharge for second homes does not apply”
Does this mean that I would pay the lower rate of SDLT when transferring my residential to my LTD and would also pay the lower rate of SDLT for my onward purchase for my new resi?? My understanding before I read this was I’d pay the higher rate of the transfer to the LTD and lower rate in onwards resi purchase?
Thanks
You made 0 sense . Moving on
Not to you but others got it 😏
Don’t be a fool. I’m not the only one. Like be clear if you want help or don’t waste peoples time