My wife and I have lived in our home in Bristol for 20 years, and I want to split our home into two flats and sell one of the flats to our LLP. Will we incur stamp duty land tax (SDLT) and capital gains tax (CGT)?
Arthur Weller replies:
Look at HMRC’s Partnerships manual at PM131430, where it states: "Capital gains: The transfer of a business from a general partnership to an [limited liability partnership (LLP] will not constitute a disposal by the partners of their interests in the original partnership’s assets", and "Stamp duty land tax: The transfer of chargeable interests to the LLP will be exempted from charge if certain conditions are met. Please refer to SDLTM33690 for full details". The reason for this is, as stated at PM131450: "All the activities of the LLP are treated as being carried on in partnership by its members (and not by the LLP as such)", and: "Most LLPs are transparent for tax purposes".