BTL via Ltd Co.
Discussion
Hi all,
Looking to get a mortgage on a BTL with the wife and sister-in-law in January next year. We are hoping to do this via a limited company for tax reasons. My question is, are we best of setting up the limited company now or are we ok to wait until we are in Dec/Jan and at the point of applying for a mortgage?
Thanks
Looking to get a mortgage on a BTL with the wife and sister-in-law in January next year. We are hoping to do this via a limited company for tax reasons. My question is, are we best of setting up the limited company now or are we ok to wait until we are in Dec/Jan and at the point of applying for a mortgage?
Thanks
Setting up a company takes minutes, assuming you know how you want to structure it already.
If you don't know how you want to structure it, e.g. shareholder structure, I suggest you speak to an aco
ant.
But setting up the bank account can take a couple of weeks or more depending on lots of factors about you and anyone else with access to the account.
Given you are asking on here, I presume you have decided you want a Ltd company based on google internet research ?
If so, then you really need some to pay for some proper tax advice from an accountant that is based on your particular circumstance.
Self inflicted mistakes can be costly to rectify where property is concerned.
If you don't know how you want to structure it, e.g. shareholder structure, I suggest you speak to an aco
ant.But setting up the bank account can take a couple of weeks or more depending on lots of factors about you and anyone else with access to the account.
Given you are asking on here, I presume you have decided you want a Ltd company based on google internet research ?
If so, then you really need some to pay for some proper tax advice from an accountant that is based on your particular circumstance.
Self inflicted mistakes can be costly to rectify where property is concerned.
Mark-r0xn8 said:
Setting up a company takes minutes, assuming you know how you want to structure it already.
If you don't know how you want to structure it, e.g. shareholder structure, I suggest you speak to an acoant.
But setting up the bank account can take a couple of weeks or more depending on lots of factors about you and anyone else with access to the account.
Given you are asking on here, I presume you have decided you want a Ltd company based on google internet research ?
If so, then you really need some to pay for some proper tax advice from an accountant that is based on your particular circumstance.
Self inflicted mistakes can be costly to rectify where property is concerned.
We have the tax advise already and the ltd company is the preferred route for us all and for what we’re looking from this and I know how ‘simple’ it is to set up etc but I’m just thinking from a lenders POV - would there be a concern over a company being incorporated around the time of application etc. Even though, on the flip side the company wouldn’t have anything going through even if we incorporated now. If you don't know how you want to structure it, e.g. shareholder structure, I suggest you speak to an aco
ant.But setting up the bank account can take a couple of weeks or more depending on lots of factors about you and anyone else with access to the account.
Given you are asking on here, I presume you have decided you want a Ltd company based on google internet research ?
If so, then you really need some to pay for some proper tax advice from an accountant that is based on your particular circumstance.
Self inflicted mistakes can be costly to rectify where property is concerned.
chml said:
Mark-r0xn8 said:
Setting up a company takes minutes, assuming you know how you want to structure it already.
If you don't know how you want to structure it, e.g. shareholder structure, I suggest you speak to an acoant.
But setting up the bank account can take a couple of weeks or more depending on lots of factors about you and anyone else with access to the account.
Given you are asking on here, I presume you have decided you want a Ltd company based on google internet research ?
If so, then you really need some to pay for some proper tax advice from an accountant that is based on your particular circumstance.
Self inflicted mistakes can be costly to rectify where property is concerned.
We have the tax advise already and the ltd company is the preferred route for us all and for what we’re looking from this and I know how ‘simple’ it is to set up etc but I’m just thinking from a lenders POV - would there be a concern over a company being incorporated around the time of application etc. Even though, on the flip side the company wouldn’t have anything going through even if we incorporated now. If you don't know how you want to structure it, e.g. shareholder structure, I suggest you speak to an aco
ant.But setting up the bank account can take a couple of weeks or more depending on lots of factors about you and anyone else with access to the account.
Given you are asking on here, I presume you have decided you want a Ltd company based on google internet research ?
If so, then you really need some to pay for some proper tax advice from an accountant that is based on your particular circumstance.
Self inflicted mistakes can be costly to rectify where property is concerned.
If buying properties through a limited company, be aware of the tax rules for limited companies - especially investment companies and Capital Gains Tax on disposal of assets.
Even though you may shelter the rental income from Income Tax you will pay Corporation Tax on rental profits (which is rising to 25% next year).
And finally, extracting personal income from the company will result in personal; Income Tax charges plus, possible, National Insurance.
Even though you may shelter the rental income from Income Tax you will pay Corporation Tax on rental profits (which is rising to 25% next year).
And finally, extracting personal income from the company will result in personal; Income Tax charges plus, possible, National Insurance.
chml said:
Hi all,
Looking to get a mortgage on a BTL with the wife and sister-in-law in January next year. We are hoping to do this via a limited company for tax reasons. My question is, are we best of setting up the limited company now or are we ok to wait until we are in Dec/Jan and at the point of applying for a mortgage?
Thanks
What are the advantages of doing this? Would there be a minimum portfolio size or value before it’s worth doing?Looking to get a mortgage on a BTL with the wife and sister-in-law in January next year. We are hoping to do this via a limited company for tax reasons. My question is, are we best of setting up the limited company now or are we ok to wait until we are in Dec/Jan and at the point of applying for a mortgage?
Thanks
alfa aficionado said:
What are the advantages of doing this? Would there be a minimum portfolio size or value before it’s worth doing?
It can be more tax efficient, both in terms of the expenses you can claim and how the income is taxed. On the flip side, BTL mortgages have higher rates and you also have accountancy fees on the LTD company. Depends on your specific situation but gut feel is I wouldn’t look at it for 1 property but possibly 2+.It also depends on whether the properties are already owned or yet to be purchased, how many you expect to end up with, how much leverage (and hence free cash flow), and if there is going to be any complexity in their ownership structure.
Fwiw, I would not under any circumstances want to buy jointly with friends or extended family. Seen it go wrong too many times as lives/circumstances change. Friends/family and money are best kept separate…
Fwiw, I would not under any circumstances want to buy jointly with friends or extended family. Seen it go wrong too many times as lives/circumstances change. Friends/family and money are best kept separate…
The theory is sound but it really depends on what your intentions are.
The more properties you were to hold, the more beneficial it would become.
If you are going to buy a few, Eg 5 or less, stay personal.
Once you get above 5 rentals, lenders start to class you as a portfolio landlord, so the rates and fee's change as does the lending criteria. At this point it starts to lean towards being better to look as Ltd Company ownership.
Lots of people come to me wanting to do it for their first property or when they intend to only buy 2-3......most haven't taken proper tax advice which you must do to ensure it's going to benefit you....
The more properties you were to hold, the more beneficial it would become.
If you are going to buy a few, Eg 5 or less, stay personal.
Once you get above 5 rentals, lenders start to class you as a portfolio landlord, so the rates and fee's change as does the lending criteria. At this point it starts to lean towards being better to look as Ltd Company ownership.
Lots of people come to me wanting to do it for their first property or when they intend to only buy 2-3......most haven't taken proper tax advice which you must do to ensure it's going to benefit you....
Very sound advice.
I think the tax complications are not worth it if you are considering just a single property. If you intend to become an entrepreneurial landlord operating a large portfolio of properties, then yes, operating through a corporate structure (such as a limited company) will make more sense.
I think the tax complications are not worth it if you are considering just a single property. If you intend to become an entrepreneurial landlord operating a large portfolio of properties, then yes, operating through a corporate structure (such as a limited company) will make more sense.
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