Is BTL still possible?
Discussion
sebdangerfield said:
No I can't find Phonh in my dictionary that's odd as I can't find it on that link either. It's in my Vietnamese dictionary though, another language I'm bumbling through. Interestingly the link you've pasted quotes ???? which directly translated is foní as my correction of Groak's phoni teachings on the other post.
I transliterated eta as h so I think we are talking about the same word.sebdangerfield said:
Indeed. And if you ever happen to make it known you've recently bought a new car and then use that fact to prove a house is yours when making up stories make sure you buy a Mondeo first.
Maybe we’ll take the wife’s Smart up next time, as it’s far more likely that someone who’s worked in the city for twenty-five years is driving round in one of those than a reasonably-priced supercar.Groat said:
hmmmmm. No need to get overwrought old boy
At what point does googling "is phon Latin or Greek" turn into "furious gammon googling"?
(and, equally uninterestingly, why won't you accept it, Doctor)?
I'd say for me furious gammon googling is what you do when I get into an argument with you about something you clearly have no real knowledge of but won't ever concede you're wrong. And then every time I refresh the page you've edited your post. At what point does googling "is phon Latin or Greek" turn into "furious gammon googling"?
(and, equally uninterestingly, why won't you accept it, Doctor)?
Edited by Groat on Tuesday 31st August 15:44
It's ace. Groat said:
Hands up who CAN'T see a link between symFONIa and symPHONY? 
(hint: try saying them with eyes closed)
I didn't say they weren't similar. I just said you were wrong when you 'taught' me that the Greek word for sound was phon. Bearing in mind the Greek word for sound is íchos. Then you 'taught' me the word you actually meant phon translated to was voice. Which is foní. Its the same as me calling you pillock or a pillow. (hint: try saying them with eyes closed)
Groat said:
DonkeyApple said:
braying loudly at clouds
Hee haw . Another of your great bits of investing advice. Went the same way as that pay day lending gambit and the high leverage resi scheme. All safe as houses, idiot proof and all gone the way predicted. sebdangerfield said:
I'd say for me furious gammon googling is what you do when I get into an argument with you about something you clearly have no real knowledge of but won't ever concede you're wrong. And then every time I refresh the page you've edited your post. It's ace.
https://findanyanswer.com/is-the-root-word-phon-latin-or-greek It's ace. https://findanyanswer.com/is-the-root-word-phon-la...
I say 'phon' is a GREEK and not LATIN root word. You say it's LATIN not GREEK.
Do you want me to concede I'm wrong?
Why?
It IS GREEK and not LATIN.
sebdangerfield said:
Please don't. I certainly appreciate the pics!
Not my car, and not my house, but it is in the same street; the original Geordie Shore house was a few doors down from mine before the Nimby neighbours got it moved to a studio.https://www.michael84.co.uk/the-geordie-shore-hous...
DonkeyApple said:
Groat said:
DonkeyApple said:
braying loudly at clouds
Hee haw . Another of your great bits of investing advice. Went the same way as that pay day lending gambit and the high leverage resi scheme. All safe as houses, idiot proof and all gone the way predicted. However, as I've said before, I'd guess over the last 50 years, at least 60% of my "investments" (including 2 pensions and an endowment) have been a waste of time and money. (Full list available on request).
Dolphin Trust is actually of some ongoing interest. Here's the latest, for anyone who's interested:
https://drive.google.com/file/d/1pXGRZQXej7RecZ1Rb...
Quite the caper......not quite Madoff size, but still 10 figures
So, if that's everyone got the digressions + bile out of their systems.......for the benefit of the OP......
The answer is resoundingly YES, BTL is still possible!!!
As Condi has made clear, like many a business, taxation needs to be carefully looked at and its administration astutely assigned.
That's Greek (pardon me, Doctor) for get a f
kin accountant who knows the property field inside out and preferably who is himself a landlord.
As Northernboy has made clear, if you know nothing about property or landlording you can make a severe start-to-finish arse of it even though that's quite difficult to do.
This is quite an important point. If you know nothing then either expect to learn the hard way, or short circuit the lot and get an agent. Not just a letting agent, a property managing letting agent. Preferably one who sees 'portfolio building' as a way to increase THEIR portfolio of properties under management.
As many a thread has made clear, selecting an agent is a skill in itself as many (if not most) of them are shyte. But not all are. This is perhaps the most important 'skill' (and possibly the only 'skill') you'll need.
There is really only one SERIOUS threat to property letting in the medium/long term. Loony grade Socialism. This is far more of a threat in Scotland than in England, so if you plan to operate in England, forget about it.
All the threats and pitfalls (taxation etc) described in this and many other PH threads concern potential changes to a marketplace to which you simply need to adapt. This has been going on and will continue to go on - since forever - and so has letting.
Like any and every other type of BUSINESS there is no guarantee or certainty that you will do well or fail. That's entirely up to you, as is the scale of your BUSINESS.
Go for it. After all, the worst that can happen is that you fk it up. And there's not a businessman in the world who hasn't fked up at some point. But if you can't face that, then DON'T go for it.
The answer is resoundingly YES, BTL is still possible!!!
As Condi has made clear, like many a business, taxation needs to be carefully looked at and its administration astutely assigned.
That's Greek (pardon me, Doctor) for get a f
kin accountant who knows the property field inside out and preferably who is himself a landlord. As Northernboy has made clear, if you know nothing about property or landlording you can make a severe start-to-finish arse of it even though that's quite difficult to do.
This is quite an important point. If you know nothing then either expect to learn the hard way, or short circuit the lot and get an agent. Not just a letting agent, a property managing letting agent. Preferably one who sees 'portfolio building' as a way to increase THEIR portfolio of properties under management.
As many a thread has made clear, selecting an agent is a skill in itself as many (if not most) of them are shyte. But not all are. This is perhaps the most important 'skill' (and possibly the only 'skill') you'll need.
There is really only one SERIOUS threat to property letting in the medium/long term. Loony grade Socialism. This is far more of a threat in Scotland than in England, so if you plan to operate in England, forget about it.
All the threats and pitfalls (taxation etc) described in this and many other PH threads concern potential changes to a marketplace to which you simply need to adapt. This has been going on and will continue to go on - since forever - and so has letting.
Like any and every other type of BUSINESS there is no guarantee or certainty that you will do well or fail. That's entirely up to you, as is the scale of your BUSINESS.
Go for it. After all, the worst that can happen is that you f
k it up. And there's not a businessman in the world who hasn't fked up at some point. But if you can't face that, then DON'T go for it. How do you go about moving an owned-outright property, into a more efficient limited company structure for letting?
Can you really put more costs against income that you can’t in self-assessment?
Is this all driven by dividend income at a superior tax rate to normal income tax rates?
I think I briefly saw someone talking about the business repaying a loan, and that’s a cost to the business?
Is that because the business gets in debt to the director when the house is transferred across?
This for years and years the business is just repaying a loan?
How does the tax work out when liquidating? Sell house, get cash. Repay debts.
CGT? Then cash lump to shareholders?
Can you really put more costs against income that you can’t in self-assessment?
Is this all driven by dividend income at a superior tax rate to normal income tax rates?
I think I briefly saw someone talking about the business repaying a loan, and that’s a cost to the business?
Is that because the business gets in debt to the director when the house is transferred across?
This for years and years the business is just repaying a loan?
How does the tax work out when liquidating? Sell house, get cash. Repay debts.
CGT? Then cash lump to shareholders?
Mr Whippy said:
How do you go about moving an owned-outright property, into a more efficient limited company structure for letting?
Isn't the problem that for any higher value property the SDLT (base plus 3% surcharge) is so high in comparison to the net rental yield that you'll give up many years of income to do this?Presumably it also causes problems if you subsequently want to revert to using that property as a main / holiday residence yourself.
Mr Whippy said:
How do you go about moving an owned-outright property, into a more efficient limited company structure for letting?
Can you really put more costs against income that you can’t in self-assessment?
Is this all driven by dividend income at a superior tax rate to normal income tax rates?
I think I briefly saw someone talking about the business repaying a loan, and that’s a cost to the business?
Is that because the business gets in debt to the director when the house is transferred across?
This for years and years the business is just repaying a loan?
How does the tax work out when liquidating? Sell house, get cash. Repay debts.
CGT? Then cash lump to shareholders?
Yes to a lot of that really. Can you really put more costs against income that you can’t in self-assessment?
Is this all driven by dividend income at a superior tax rate to normal income tax rates?
I think I briefly saw someone talking about the business repaying a loan, and that’s a cost to the business?
Is that because the business gets in debt to the director when the house is transferred across?
This for years and years the business is just repaying a loan?
How does the tax work out when liquidating? Sell house, get cash. Repay debts.
CGT? Then cash lump to shareholders?
You (the company director) can lend the business money to get going (say £100k), and then this can be paid back tax free - as you're just getting your own money back out again, basically.
Any profits can then be taken as dividends (lower tax), paid into a private pension, or kept within the company and then paid out later. For example wait until retirement and withdraw profits then, when you are more likely to be a lower rate taxpayer. The company however will pay tax on it's profits year by year.
The company has no tax free allowance of CGT and so will pay tax on any uplift in value of the property.
You can put all the costs of the business (full mortgage interest cost) against profits, whereas for an individual you can't any more.
I will defer to others regarding "moving a property into a business", but believe it requires you (the individual) to sell the house to the business as they are legally separate entities. It has to be at market value and the correct taxes will need to be paid (eg. additional stamp duty). Although Groat may know more about that.
Groat said:
I say 'phon' is a GREEK and not LATIN root word. You say it's LATIN not GREEK.
Do you want me to concede I'm wrong?
No you didn't. You said this;Do you want me to concede I'm wrong?
Groat said:
In reality "phon" is the Greek word for 'sound'. 
Which is utterly incorrect. The word for sound is íchos or ήχος.If you want to discuss the etymology that's fine too; I'd highly recommend first reading Charles Talbot Onions' work on the matter. like I said previously, he found that as there's no written history to back up whether phōnētikós (greek) or phōnēticus (latin) was the first use of the word nobody can truly say for certain what its origin is. Whilst I do appreciate your temerity on the subject and appreciate your mostly clickable link to a web page I have more confidence for now in Onions' observations.
Mr Whippy said:
How do you go about moving an owned-outright property, into a more efficient limited company structure for letting?
Can you really put more costs against income that you can’t in self-assessment?
Is this all driven by dividend income at a superior tax rate to normal income tax rates?
I think I briefly saw someone talking about the business repaying a loan, and that’s a cost to the business?
Is that because the business gets in debt to the director when the house is transferred across?
This for years and years the business is just repaying a loan?
How does the tax work out when liquidating? Sell house, get cash. Repay debts.
CGT? Then cash lump to shareholders?
From my (parent's) experience, moving property from personal ownership into a company is tricky, without paying stamp duty and not crystallising a huge capital gains bill - technically the ownership is changing and so stamp duty would be normally due. Plus there is the added hassle of needing to notify the banks who provide the mortgages, as they often consider the risk profile to be different if they are lending to a company rather than a private individual. Can you really put more costs against income that you can’t in self-assessment?
Is this all driven by dividend income at a superior tax rate to normal income tax rates?
I think I briefly saw someone talking about the business repaying a loan, and that’s a cost to the business?
Is that because the business gets in debt to the director when the house is transferred across?
This for years and years the business is just repaying a loan?
How does the tax work out when liquidating? Sell house, get cash. Repay debts.
CGT? Then cash lump to shareholders?
There used to be something of a loophole (and I don't know if it is still open) where if the property was previously part of an LLP, and the new company is owned by the same person/s then you could effectively transfer it to the limited company but without ever completing the transaction. It isn't easy though; money still needs to be shown to HMRC that it actually moved, even if for only for 24 hours. It all needs to be done in a single process i.e. you can't move them over gradually. And you need to make some specific declarations to HMRC, and you also need a water tight paper trial as you are *very* likely to get inspected due to the amount of tax involved. Hence it was only worth doing if you have a fairly large number of properties.
My mum did this process, passed the HMRC checks, and "only" needed to pay circa £40k of fees for the necessary specialist advice (which was much less than the stamp duty and capital gains). Plus you also get the opportunity to revalue the properties at the current value at the point of transfer which substantially changes the future capital gains liabilities when you eventually sell.
Obviously this is just my layman's recollection - I wasn't involved in it directly, although I did get a detailed run down at the time, but it is possible I may have misremembered some of the exact details. Bottom line - unless you have quite a lot of property, and you fit a strict criteria, it wouldn't be worth the effort and is better just to pay the stamp duty etc.
Groat said:
DonkeyApple said:
Groat said:
DonkeyApple said:
braying loudly at clouds
Hee haw . Another of your great bits of investing advice. Went the same way as that pay day lending gambit and the high leverage resi scheme. All safe as houses, idiot proof and all gone the way predicted. However, as I've said before, I'd guess over the last 50 years, at least 60% of my "investments" (including 2 pensions and an endowment) have been a waste of time and money. (Full list available on request).
Dolphin Trust is actually of some ongoing interest. Here's the latest, for anyone who's interested:
https://drive.google.com/file/d/1pXGRZQXej7RecZ1Rb...
Quite the caper......not quite Madoff size, but still 10 figures
Some people are just drawn to frauds, mismanagement or farces. It's their nature.
Centurion07 said:
Not really any wonder why so many LL's forget to declare their entire rental income is it...? 
Someone mentioned that socialism is the likely largest threat facing resi property investment but that's rather obviously 100% off the mark. Given the enormous debt pile taken on by the country over the last 18 months, the absence of efficient tax collection on property, the ease at which property can be taxed then the single largest risk to all property owners at present, is capitalism. The UK has to raise taxation. They'll attempt to delay it as long as possible but there will be tax increases and property ownership is a very likely target, especially landlords as that side is a huge vote winner. Plus, with up to £2bn a year being evaded by landlords there is a moral obligation to bring an end to turning a blind eye to that fraud.
Landlords deliver a vital service to the economy but the ones who subsequently defraud it do need to be found and hounded. It's not exactly difficult to cross reference the various databases to find the people overtly taking the piss and then ask them to supply evidence that they aren't criminals who owe the taxpayer a chunk of cash.
EddieSteadyGo said:
There used to be something of a loophole (and I don't know if it is still open) where if the property was previously part of an LLP, and the new company is owned by the same person/s then you could effectively transfer it to the limited company but without ever completing the transaction.
This sounded interesting so I looked it up. I think what you are referring to is the Ramsay vs HMRC case in 2013?Ramsay won and got CGT roll-over relief on the transfer of properties held in a partnership into a limited company. She had to meet various tests to show that this was a business not an investment, including worked 20+ hours / week on the maintenance of the properties and having no other job. Unlike your description, Ramsay didn't get to step up the CGT basis - she deferred the tax but the basis stayed at the original purchase cost, so no "freebie".
https://assets.publishing.service.gov.uk/media/576...
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