Readers' forum : Portfolio planning

My client is considering the incorporation of a number of buy-to-let portfolios which will involve refinancing the current mortgages.

My first query concerns the operation of Extra Statutory Concession D32 which states: ‘Where liabilities are taken over by a company on the transfer of a business to the company HMRC are prepared for the purposes of the “rollover” provision in TCGA 1992 s 162 not to treat such liabilities as consideration.’ My concern with this is how HMRC might interpret ‘liabilities taken over’.

I note that some commentators suggest that the existing mortgages must be novated to the company (so it stands in the shoes of the original borrower(s)) for the concession to apply. If therefore the company takes out fresh lending with a different lender in order to pay off the existing mortgages I believe that this might create a problem.

I...