Cash-rich company

My client is the sole director and shareholder of a cash-rich company. He also personally owns a buy-to-let residential property worth about £350 000.

With the 2014 autumn statement introducing stamp duty land tax (SDLT) concessions for residential property my client has asked whether he could sell half of the property to the company. This would enable him to take £175 000 cash out of the company which would then receive half of the rental income.

Am I correct that the SDLT charge will be only £1 000 ie 2% of the £50 000 proceeds above the nil-rate band? And will he still qualify for capital gains tax entrepreneurs’ relief if the company continues to trade and the property is sold and the company liquidated in say 10 years?

Query 18 515 – Property Man

Reply from Joe 90

Property Man is correct...