Can a property be distributed in spcie by a comopany without paying SDLT?

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This topic contains 6 replies, has 1 voice, and was last updated by Can a property be distributed in spcie by a comopany without paying SDLT? by Patrick Cannon 1 Patrick 21st November 2008 at 10:28 am.

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  • #338 Reply
    Can a property be distributed in spcie by a comopany without paying SDLT? by Patrick Cannon 2
    Tim Forde

    I am aware of the rafts of anti-avoidance legislation regarding investment partnerships and groups of companies on the distribution of land in-specie. Do these provisions apply to more traditional distributions of land and buildings from say small family companies to its individual shareholders either while still trading or during winding up? Many thanks – Tim

    #339 Reply
    Can a property be distributed in spcie by a comopany without paying SDLT? by Patrick Cannon 3
    Patrick Cannon

    In principle the anti-avoidance rules apply to small family trading companies as to any other but it should normally be possible to distribute land in specie without an SDLT charge as long as you avoid any assumption of debt charged on the land – see section 54(4) and para 8 Sch 4 FA 2003.

    #340 Reply
    Can a property be distributed in spcie by a comopany without paying SDLT? by Patrick Cannon 2
    Tim Forde

    Thank you Patrick. So a very straightforward case where a company distributes land in specie, in the course of winding up or otherwise, where there is no debt involved at all or group arrangements should be free of SDLT as there is no consideration? It is a one sided transaction?

    #341 Reply
    Can a property be distributed in spcie by a comopany without paying SDLT? by Patrick Cannon 3
    Patrick Cannon

    Yes. The transferee will not have to pay SDLT nor file a return and the land transfer can be sent direct to the Land Registry with a covering letter stating that there is no consideration.

    #342 Reply
    Can a property be distributed in spcie by a comopany without paying SDLT? by Patrick Cannon 2
    Tim Forde

    How about where a company distributes a property into its occupational pension scheme as a company pension contribution? Would the market value rules apply here, none of the exceptions in s54 would seem to apply to this transaction?. Thank you.

    #343 Reply
    Can a property be distributed in spcie by a comopany without paying SDLT? by Patrick Cannon 2
    Jimmy Macdonald

    Can you please clarify for me – I’m getting conflicting answers on this. If Company A distributes a property owned by it into the SIPP as a pension scheme contribution, my understanding is that this would not attract SDLT as it is a transfer for no chargeable consideration.and as such it would be exempt under Section 3 Para 1 of the Finance Act 2003. Is this correct?

    #344 Reply
    Can a property be distributed in spcie by a comopany without paying SDLT? by Patrick Cannon 3
    Patrick

    This scenario raises some complex issues which is probably why you are getting conflicting answers! I wouldn’t venture a simple answer given that each situation will depend on its facts although one potentially complicating factor is that a contribution by the employing company may not be a gift given that the company would only be willing to do so in return for the services of the employee to the company.

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