Step-by-Step: Moving a Property Portfolio from Personal to Company Ownership

The Challenge

A husband and wife had built up a property portfolio worth approximately £1 million, which they had managed jointly for many years. Although there was no formal partnership agreement in place, the business had effectively been operated as a partnership. As their portfolio grew, they began considering succession planning and how best to mitigate future Inheritance Tax (IHT) exposure. Incorporating the property business was seen as a logical next step, but they were concerned about the potential Capital Gains Tax (CGT) and Stamp Duty Land Tax (SDLT) liabilities on transferring the properties into a company structure.

The Solution

We undertook a detailed review of their historic arrangements, income records, and how the properties had been managed and accounted for. Based on the evidence of long-term joint ownership and operation, we confirmed that the business could qualify as a genuine property partnership for tax purposes. This allowed the incorporation to proceed under SDLT relief for partnerships, and the CGT incorporation relief rules were applied, meaning the transfer could take place without triggering any immediate tax liabilities.

The Value

The clients successfully incorporated their property business into a limited company with no SDLT or CGT payable at the point of transfer. They now benefit from improved tax efficiency, full mortgage interest relief within the company, and greater flexibility to plan for succession. With the company structure in place, we are now working with them to implement a long-term IHT strategy to pass on wealth to future generations in a tax-efficient way.