What are the pitfalls (if any) of moving from partnership to incorporation? Or should I turn my current buy-to-let (BTL) in Coventry into a furnished letting? Would capital gains tax (CGT) be rolled over, and then would this affect inheritance tax (IHT)?
Arthur Weller replies:
(a) There could be CGT for the partnership to pay on incorporation. (b) There could be stamp duty land tax for the company to pay on incorporation. (c) It may be difficult and expensive to transfer any existing mortgage from the partnership to the company. Furnished holiday letting (FHL) properties do not have the ‘section 24 restriction’ on claiming interest relief for residential landlords, but it is not always easy to turn a property into an FHL. Capital gains cannot be rolled over. This should not affect IHT.