The U.K. government made it very clear in their August consultation document that there would be no relief available for people looking to transfer residential property out of the corporate envelope.
Unfortunately this means that there is no easy answer to the "What Should I Do?" Question. Or rather it does - take tax advice from an expert as soon as possible. The UK government's proposals will go ahead on 6 April 2017 whether you are ready or not.
We most frequently see de-enveloping taking place either by way of an arms length sale or by transferring the property in specie to the corporate structure's shareholders or members.
Typically the in specie transfer would see the company placed into voluntary solvent liquidation and the property transferred to the shareholders. This is straightforward if the company has no debt or liabilities, but if there is third party debt, then the transfer would typically be subject to Stamp Duty Land Tax on the debt amount.
Preparation is key to this process. It is important that you remember that there may be property issues which may delay or even frustrate the process and / or your timing.
We can help review the title to the property to check for any restrictions. If the Property is leasehold, you may need the Landlord's consent to the transfer of the property and they often have some hoops for you to leap through. They may require references and due diligence on the individuals who will own the property, even if these have been the same people who were using the property.
It is also important to check what else the company owns before it is liquidated. There may be shares in the management company, guarantees for repairs and works at the Property and of course the rights to extend leases or buy the freehold which are only obtained through owning the Property for a period of time. All too often little (but important!) parcels of land are forgotten about, which can be costly to correct once the company has gone from the Registry.