Land transfer tax on real estate transfer in the UK
August 26, 2020 | 35,00 EUR | answered by Steuerberater Knut Christiansen
A wants to contribute his property to a GBR as joint ownership. B effectively contributes nothing (1 EUR) to the GBR. The capital and non-cash contributions are fixed and decisive for the shareholders' participation in profit distribution as well as for the exercise of voting rights.
Will real estate transfer tax be incurred in the transfer of the property?
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I would like to answer your question as part of an initial consultation. Please note that this forum cannot replace personal advice and therefore only serves as a first tax assessment. A binding statement can only be made as part of a personal consultation with access to the contractual basis.
In principle, the transaction is subject to real estate transfer tax to the extent that B is involved in the property after the contribution. If I understand you correctly, B is only involved in the GbR with 1 euro and A is essentially the sole owner even after the contribution to the joint assets. Therefore, due to the low stake and consideration (1 euro), no real estate transfer tax would be due. If B is involved with more than 1 euro but does not have to pay more for it, there would be a gift from A to B. However, this would be exempt from real estate transfer tax according to § 3 No. 2 GrErwStG.
Best regards
Knut Christiansen
Tax consultant
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