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Is SDLT chargeable on property transfers to recoup a director’s loan?
We act for a residential property development business that is a trading company. It entered into a members’ voluntary liquidation in March 2016 to avoid the consequences of the tax changes to distributions in a winding-up in Finance Bill 2016. Properties were transferred to the shareholders before 6 April 2016 as distributions in specie which did not attract stamp duty land tax (SDLT).
One of the directors who is a 50% shareholder loaned a substantial sum of money to the company to finance the development costs of the trading activity. It is likely that at the end of the 12-month liquidation period the liquidator may be left with a number of unsold residential development properties.
The plan would be to transfer these unsold properties to the director/shareholder as settlement of his unpaid loan balance with the company.
Our query is whether SDLT would be payable by him on these transfers.
...Please reach out to customer services at +44 (0) 330 161 1234 or 'customer.services@lexisnexis.co.uk' for further assistance.
