Stamp Duty for Transferring Property to Company
- You can gift property to a limited company and avoid stamp duty if you aren't connected to the company.
- Stamp Duty for transferring property to a company you're connected to is charged at the current market value.
- You can transfer property to a company without paying stamp duty if the property is already in a partnership.
- You can gift property without paying stamp duty. Read here - What is the stamp duty on a gifted property?
You can transfer property to a limited company to deduct mortgage interest and other property expenses to reduce the tax you pay on the property income. Most landlords gift the property to their limited company if there is no mortgage. Where there is a mortgage, you can transfer the value of the mortgage by getting a mortgage in the company name.
It doesn't matter what price you transfer the property for. The stamp duty rules are different when you transfer property to a company because they aren't based on the consideration IE the money changing hands. The stamp duty is based on the property's current market value, and you'll pay the normal and additional stamp duty rates.
What is the stamp duty when gifting property to a limited company?
Legislation states you pay stamp duty on the property's market value on the transfer day.
Under section 53 of the Finance Act 2003, it states:
Deemed market value where transaction involves connected company...The chargeable consideration for the transaction shall be taken to be not less than (a)the market value of the subject-matter of the transaction as at the effective date of the transaction.
If you own your property in a partnership, then there may be no SDLT payable so read How do I transfer a partnership to a limited company with no SDLT.
Get an Online Conveyancing Quote to transfer your property into a Limited Company or call us today on 0333 344 3234.
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- Gifted transfer or Company mortgage
How do you know if you are linked to a company?
If you're not connected to a limited company, you can gift a property to the company. The question would be, why would you gift a buy-to-let property where you won't receive the benefit? Here's how you find out if you are connected to a limited company.
Under section 1122 of the Corporation Tax Act 2010, it states:
a company is connected with another person ("A") if:
- You control the company: or
- You, together with persons connected with you, have control of the company.
This means that not only will you be connected if you are the sole shareholder, you could be connected if someone else has control of the company and is connected to you by:
- Your spouse or civil partner;
- Your a relative;
- You are the spouse or civil partner of a relative;
- You are a relative of the shareholder's spouse or civil partner: or
- You are the spouse or civil partner of a relative of the shareholder's spouse or civil partner.
If you are connected in any way listed above, then you cannot gift the property to the company, and you'll pay Stamp Duty on the property's full market value.
How do you transfer property to a company without paying stamp duty?
Gift the property to a company you're not connected to
A highly unlikely option as you have no upside to the transfer. You'd be avoiding the stamp duty at the cost of no longer owning the property.
Transfer from a Partnership
You don't pay SDLT when you transfer from a partnership to a limited company. Read more - How do I transfer a partnership to a limited company with no SDLT?
3 rates of stamp duty could be applied to the current market value of the property:
- Normal Rate
- Additional Rate
- Non-UK Resident
| Property Price | Standard Rate of Stamp Duty | Additional Home Rate (updated post Oct 2024 budget) | Non UK Resident Rate |
| £0 - £125,000 | 0% | 5% | 2% |
| £125,001 - £250,000 | 0% | 5% | 2% |
| £250,001 - £925,000 | 5% | 10% | 2% |
| £925,001 - £1.5 million | 10% | 15% | 2% |
| Over £1.5 million | 12% | 17% | 2% |
Use our free online stamp duty calculator to see what stamp duty you'll pay on the transfer to your company.
What is normally classed as consideration for land or property for SDLT?
Consideration is most commonly the amount you pay for the property, which is reflected on the contract between you and the seller, however, it can also be:
- giving of goods (giving a personal possession in exchange for the land/property);
- providing works or services (giving work or a service in exchange for the land or property); release from a debt; and/or
- transfer of a debt, including the balance of an outstanding mortgage;
The above rules of consideration do not apply when transferring property into a limited company that you are linked to.
We specialise in transferring property to companies so please get in contact if you need any help with the process - Call 0207 112 5388 or email help@samconveyancing.co.uk.
Caragh is an excellent writer and copy editor of books, news articles and editorials. She has written extensively for SAM for a variety of conveyancing, survey, property law and mortgage-related articles.
