Hi All,
Wife and I are thinking about buying a new personal home, and retaining our existing personal home but changing its use to a rental - we own it freehold. We are thinking of establishing a jointly owned LTC which would buy our existing home off us, and would use new mortgage debt raised by the LTC to do that.
in our hands as shareholders, we would use the proceeds of the sale to buy the new personal home, which would be owned directly by us.
Is there any risk that the LTC would not get a tax deduction on interest expense if we did this. i.e. - could the establishment of the LTC, the sale from us to it, and the gearing up of the currently freehold property be viewed in substance as avoiding tax?
Keen on your thoughts.
Cheers, Andrew
Wellington
Wife and I are thinking about buying a new personal home, and retaining our existing personal home but changing its use to a rental - we own it freehold. We are thinking of establishing a jointly owned LTC which would buy our existing home off us, and would use new mortgage debt raised by the LTC to do that.
in our hands as shareholders, we would use the proceeds of the sale to buy the new personal home, which would be owned directly by us.
Is there any risk that the LTC would not get a tax deduction on interest expense if we did this. i.e. - could the establishment of the LTC, the sale from us to it, and the gearing up of the currently freehold property be viewed in substance as avoiding tax?
Keen on your thoughts.
Cheers, Andrew
Wellington
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