FORMING A LIMTED COMPANY

[bob561941]

I HAVE A NUMBER OF INVESTMENT PROPERTIES WHICH ARE LET OUT TO TENANTS.IF I WERE TO KICK THE BUCKET MY FAMILY WOULD HAVE A LOT OF CAPITAL GAINS TAX TO PAY PLUS INHERITANCE TAX IF MY WIFE POPS HER CLOGS BEFORE ME. WOULD MY FAMILY BE BETTER OFF IF I FORMED A LIMITED PROPERTY COMPANY MAKING MY WIFE AND SONS DIRECTORS ?

[Skyline D]

Not really my area of expertise, but appointing your family as directors is meaningless. It's the ownership of the shares that is relevant. You could give them the shares of course but that's no different to giving them part ownership now. It would be a potentially exempt transfer for Inheritance tax purposes.

Professional advice needed really. All circumstances are different.

[Anngel123]

btw...capital letters are seen online as shouting (thus rather rude). As you are plainly quite wealthy...why not splash out on a actual lawyer? Or citizens' advice may be able to help.

[joggerjayne]

Well, the question of who are Directors doesn't really matter.

It's the shareholding that's important.

You could form a ltd company, and transfer the properties to the company by way of a vending agreement, in return for the allocation of shares.

If you redistributed the shares among your family, they would be treated as "potentially exempt transfers" and would escape tax if you survived for seven years.

Then, on your death, the ltd company would transfer to your estate as a going concern. As long as the shares were unquoted, you should attract business property relief.

So, the "quick fix" answer is yes ... you would be better off.

But bear in mind there will be additional obligations with which to comply if you are operating as a ltd company and, in the short term, your accounts may be more expensive to prepare.

[bob561941]

fao joggerjane thankyou for your advice i had realised that i would have to get an accountant,at the moment i complete a self assesment form which is quite easy.

[bob561941]

fao anngel 123 sorry i shouted at you i sometimes print in capitals as it is easy for me to read my eyesight being not as good as in my youth.i don't have much confidence in lawyers my wife worked as a legal secretary for many years, she had many tales of incompetence by solicitors who in conveyance work only have to tick boxes on forms supplied online by the land registry which is something i can do myself.