BTL: Buy in my company or own name??
Discussion
Opinion sought please:
Am in the process of paying cash for a BTL. Cannot decide whether to purchase in my company name or personally given there is no mortgage required.
If you're wondering why I'm not getting a mortgage, well, Barclays bank have become a bunch of s over the last few years despite me having several unencumbered rented houses; but, they have this affordability criteria that also doesn't recognise money made from a couple of building plots i sold on in houses I owned as my PPR. So, to their mind, i don't earn - despite proceeds sitting in saving accounts with them.
So, the prop is likely to be held long term, and hopefully, passed down to the children one day.
Failing that, can anyone recommend a decent mortgage company who would recognise assets and build up a lending solution?
Many thanks in advance and I have no hesitation i come across as confused in this post but thats because i am really unsure which way to go!
Am in the process of paying cash for a BTL. Cannot decide whether to purchase in my company name or personally given there is no mortgage required.
If you're wondering why I'm not getting a mortgage, well, Barclays bank have become a bunch of s over the last few years despite me having several unencumbered rented houses; but, they have this affordability criteria that also doesn't recognise money made from a couple of building plots i sold on in houses I owned as my PPR. So, to their mind, i don't earn - despite proceeds sitting in saving accounts with them.
So, the prop is likely to be held long term, and hopefully, passed down to the children one day.
Failing that, can anyone recommend a decent mortgage company who would recognise assets and build up a lending solution?
Many thanks in advance and I have no hesitation i come across as confused in this post but thats because i am really unsure which way to go!
kiethton said:
Why not buy it in a life trust?
Then it'll be cap gains tax free, may not have to pay the extra stamp (need to check) and completely safe from the tax man for inheritance purposes. Works if your buying it for your kids. A lot easier if not mortgaged as yours would be
ahh, ty.. life true never heard of..easy to set up or a PITA?Then it'll be cap gains tax free, may not have to pay the extra stamp (need to check) and completely safe from the tax man for inheritance purposes. Works if your buying it for your kids. A lot easier if not mortgaged as yours would be
i found this:
Can I put my home into a trust to save inheritance tax?
You can, but this is rarely advisable. For the gift into trust to be tax-effective, you have to give the property away with no strings attached. You are not allowed to carry on living in the property without paying a market rent for it (see related guidance "Assets that you have given away - can you still benefit from them?"). Paying rent for the home you formerly owned is not likely to appeal to you.
If you are considering tax planning but have no substantial assets other than your home, it would be much better to downsize and give away any surplus cash than to enter into any scheme involving the house itself.
Edited by kurt535 on Sunday 26th March 13:52
kiethton said:
Never had to do it myself but if trust is set up before the property is purchased should be pretty easy to do, best to seek some proper advice as you'd want to make sure it's all done properly to avoid any future claims and to ensure your not liable to care costs either..
definitely !kiethton said:
Then it'll be cap gains tax free, may not have to pay the extra stamp (need to check) and completely safe from the tax man for inheritance purposes. Works if your buying it for your kids. A lot easier if not mortgaged as yours would be
How I understand it, even buying through a trust you have to pay the extra 3%.kiethton said:
Why not buy it in a life trust?
Then it'll be cap gains tax free, may not have to pay the extra stamp (need to check) and completely safe from the tax man for inheritance purposes. Works if your buying it for your kids. A lot easier if not mortgaged as yours would be
I'm not sure where you have got this idea that Trusts pay no CGT. They do and they have half the allowance of an individual.Then it'll be cap gains tax free, may not have to pay the extra stamp (need to check) and completely safe from the tax man for inheritance purposes. Works if your buying it for your kids. A lot easier if not mortgaged as yours would be
TFP said:
kiethton said:
Why not buy it in a life trust?
Then it'll be cap gains tax free, may not have to pay the extra stamp (need to check) and completely safe from the tax man for inheritance purposes. Works if your buying it for your kids. A lot easier if not mortgaged as yours would be
I'm not sure where you have got this idea that Trusts pay no CGT. They do and they have half the allowance of an individual.Then it'll be cap gains tax free, may not have to pay the extra stamp (need to check) and completely safe from the tax man for inheritance purposes. Works if your buying it for your kids. A lot easier if not mortgaged as yours would be
I'm not allowed to go into too much detail owing to FCA regs (sophistication etc) but read this, this type of trust (or similar) if it's for the ultimate benefit of your children is what I was guiding toward in the original reply, in this there is some CGT impact:
http://www.greenwoods.co.uk/knowledge-base/private...
Alternatively if of sufficient size/value to make it worthwhile you can set up a basic oversea's trust (JPUT or other) to own the assets although this has additional complications and initial costs then you won't have any CGT liabilities.
As always get proper advice, this isn't my specilism
http://www.greenwoods.co.uk/knowledge-base/private...
Alternatively if of sufficient size/value to make it worthwhile you can set up a basic oversea's trust (JPUT or other) to own the assets although this has additional complications and initial costs then you won't have any CGT liabilities.
As always get proper advice, this isn't my specilism
kiethton said:
I'm not allowed to go into too much detail owing to FCA regs (sophistication etc) but read this, this type of trust (or similar) if it's for the ultimate benefit of your children is what I was guiding toward in the original reply, in this there is some CGT impact:
http://www.greenwoods.co.uk/knowledge-base/private...
Alternatively if of sufficient size/value to make it worthwhile you can set up a basic oversea's trust (JPUT or other) to own the assets although this has additional complications and initial costs then you won't have any CGT liabilities.
As always get proper advice, this isn't my specilism
If you are a regulated individual then you have got me worried.http://www.greenwoods.co.uk/knowledge-base/private...
Alternatively if of sufficient size/value to make it worthwhile you can set up a basic oversea's trust (JPUT or other) to own the assets although this has additional complications and initial costs then you won't have any CGT liabilities.
As always get proper advice, this isn't my specilism
This type of trust is not going to offer the benefits that you were suggesting. Have you actually even read it? It states:
The income received belongs to the life tenant and is taxed at their personal income tax rate. For
capital gains tax, the trust is taxed. The trust will have an annual allowance to offset against the
gain.
If this isn't your specialism, and you're not really sure about the subject matter, why make such claims that you can't substantiate ?
Forgetting the shonky nonsense for a moment,
OP, if you wish to transfer the property to your children in the future I think the only difference is the tax treatment of it being held by you personally. You'll need a crystal ball I think.
This is a useful start to the personal tax implications of 2nd homes/ BTL (read all of it not just the bit about main res), hopefully Eric can suggest what the implications might be for transferring shares in the Ltd
https://www.saga.co.uk/magazine/money/personal-fin...
OP, if you wish to transfer the property to your children in the future I think the only difference is the tax treatment of it being held by you personally. You'll need a crystal ball I think.
This is a useful start to the personal tax implications of 2nd homes/ BTL (read all of it not just the bit about main res), hopefully Eric can suggest what the implications might be for transferring shares in the Ltd
https://www.saga.co.uk/magazine/money/personal-fin...
Croutons said:
Forgetting the shonky nonsense for a moment,
OP, if you wish to transfer the property to your children in the future I think the only difference is the tax treatment of it being held by you personally. You'll need a crystal ball I think.
This is a useful start to the personal tax implications of 2nd homes/ BTL (read all of it not just the bit about main res), hopefully Eric can suggest what the implications might be for transferring shares in the Ltd
https://www.saga.co.uk/magazine/money/personal-fin...
murky waters indeed....odds on whichever route i take it will be harry hindsight wrong but am leaning towards paying cash. OP, if you wish to transfer the property to your children in the future I think the only difference is the tax treatment of it being held by you personally. You'll need a crystal ball I think.
This is a useful start to the personal tax implications of 2nd homes/ BTL (read all of it not just the bit about main res), hopefully Eric can suggest what the implications might be for transferring shares in the Ltd
https://www.saga.co.uk/magazine/money/personal-fin...
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