Transferring Father's Land to a Limited Co

G

GaDo

Guest
My father (still living) owns about 40 acres of land in a scenic part of the country. There is big potential for a tourism based small business to use the land as opposed to its historical farming use.

My brothers and I are interested in setting up a company to do this. What are the implications in having the land transferred from our father's name to the ownership of the company we have set up? Our father is happy to do this as he sees it as our inheritance and he no longer uses the land for farming. Would we have to pay inheritance tax? Does consideration have to be involved? Would it make a difference if our father was also a director of the company?

Thanks in advance for any advice!
 
The short answer is that unless the company is going to buy the land and pay well for it (and many advisors would say that even this is not a good reason) there is almost no good reason to transfer ownership of the land to the company.

You need to take full and proper tax and legal advice for the options open to you.
 
agree with MOB - need to be compelling reasons to transfer the asset into a company.
 
Thanks for the replies. The reason for transferring the land to the Ltd Co is so that it will be owned by us as opposed to our father.

Never thought of the leasing option - excellent idea.
 
Let your father transfer the land in to your names. You can then set up a company to run whatever business you have in mind and the company can lease the land from you.
If you transfer the land to a company then you will be facing the double taxation problem if you ever come to sell it on.
 
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