transfer my BTL's into a Ltd Company
Discussion
Good morning,
I'm about to start moving property's that are currently in my own name and place into a Ltd company that i will be setting up setting up in the next week.
8 houses in total
2 are owned out right
6 are on interest only mortgages
All house are fully managed by lettings agent.
Rents and yields will pass current stress tests.
My plan is to transfer the 2 mortgage free house into the new company
then as each mortgage deal is up for renewal,transfer it to the company.
I have heard the term 'special purchase vehicle' mentioned several times as being a crucial part of the new company set up.
So,my questions would be:-
what SIC code do i use when setting up the new co
If im transferring the houses into the new co with the intention of obtaining mortgages will i have to wait 6 months from the date of the transfer into new co. so that they would then become unencumbered
What would the mortgage broker fee's typically cost for a ltd company btl
Sorry if i've not added much detail but feel free to ask any questions via the forum or PM
All input gratefully received.
I'm about to start moving property's that are currently in my own name and place into a Ltd company that i will be setting up setting up in the next week.
8 houses in total
2 are owned out right
6 are on interest only mortgages
All house are fully managed by lettings agent.
Rents and yields will pass current stress tests.
My plan is to transfer the 2 mortgage free house into the new company
then as each mortgage deal is up for renewal,transfer it to the company.
I have heard the term 'special purchase vehicle' mentioned several times as being a crucial part of the new company set up.
So,my questions would be:-
what SIC code do i use when setting up the new co
If im transferring the houses into the new co with the intention of obtaining mortgages will i have to wait 6 months from the date of the transfer into new co. so that they would then become unencumbered
What would the mortgage broker fee's typically cost for a ltd company btl
Sorry if i've not added much detail but feel free to ask any questions via the forum or PM
All input gratefully received.
poj said:
Good morning,
I'm about to start moving property's that are currently in my own name and place into a Ltd company that i will be setting up setting up in the next week.
8 houses in total
2 are owned out right
6 are on interest only mortgages
All house are fully managed by lettings agent.
Rents and yields will pass current stress tests.
My plan is to transfer the 2 mortgage free house into the new company
then as each mortgage deal is up for renewal,transfer it to the company.
I have heard the term 'special purchase vehicle' mentioned several times as being a crucial part of the new company set up.
So,my questions would be:-
what SIC code do i use when setting up the new co
If im transferring the houses into the new co with the intention of obtaining mortgages will i have to wait 6 months from the date of the transfer into new co. so that they would then become unencumbered
What would the mortgage broker fee's typically cost for a ltd company btl
Sorry if i've not added much detail but feel free to ask any questions via the forum or PM
All input gratefully received.
You'll need specialist advice here on a couple of matters.I'm about to start moving property's that are currently in my own name and place into a Ltd company that i will be setting up setting up in the next week.
8 houses in total
2 are owned out right
6 are on interest only mortgages
All house are fully managed by lettings agent.
Rents and yields will pass current stress tests.
My plan is to transfer the 2 mortgage free house into the new company
then as each mortgage deal is up for renewal,transfer it to the company.
I have heard the term 'special purchase vehicle' mentioned several times as being a crucial part of the new company set up.
So,my questions would be:-
what SIC code do i use when setting up the new co
If im transferring the houses into the new co with the intention of obtaining mortgages will i have to wait 6 months from the date of the transfer into new co. so that they would then become unencumbered
What would the mortgage broker fee's typically cost for a ltd company btl
Sorry if i've not added much detail but feel free to ask any questions via the forum or PM
All input gratefully received.
Ensuring the properties are transferred at full market value, almost at arms length.
Making sure you address and plan around you CGT allowance/s, ie it might be better to transfer this property on this date and leave another for another tax year etc..
What you plan to do if you intend to sell any at a future date, and how you plan to extract any funds from the company, and the relevant outcome of that.
You will be able to secure a mortgage on transfer/Ltd company purchase.
Rents/Yields will be stress tested slightly differently to a personal BTL, and done differently lender by lender.
Broker fees (generally on complexity of the case), cheaper is not always better...
I would suggest to you that you find an accountant who deals with professional property investors, they may well suggest an LLP rather than a LTD company (there is no one site fits all here), or even a hybrid of the two.
Good luck and get the right professional advice... Income tax savings vs potential CGT bill need to be considered, and as you have seen with HMRC they have changed the tax rules for individuals they could well change the rules for LTD Investment companies too.
You've made some really good points there,I hadn't thought of an LLP and shall do some further digging on that.My accountant handles a lot of property businesses,so i shall ask him for some referrals as its likely that i'll know some of them already.It is my intention to leave as much as possible in the company to fund growth.
Ideal SIC code - 68209 - Other letting and operating of own or leased real estate
This is potentially going to be costly with stamp duty and capital gains. You need some detailed tax advice taking in to account your entire tax position present and future & estate planning.
With regard to getting mortgages once transferred, do you mean on the unencumbered ones? With the ones that have mortgages, you will need your LTD company to raise a mortgage to purchase them from you and repay the current lender. With the unencumbered, if you want to capital raise. Then knowing what you want to do with that capital is important. But, yes your correct it would be easier to mortgage them as part of the transaction when selling them to your company.
Its something I have done myself, feel free to contact me.
This is potentially going to be costly with stamp duty and capital gains. You need some detailed tax advice taking in to account your entire tax position present and future & estate planning.
With regard to getting mortgages once transferred, do you mean on the unencumbered ones? With the ones that have mortgages, you will need your LTD company to raise a mortgage to purchase them from you and repay the current lender. With the unencumbered, if you want to capital raise. Then knowing what you want to do with that capital is important. But, yes your correct it would be easier to mortgage them as part of the transaction when selling them to your company.
Its something I have done myself, feel free to contact me.
I have a similar question... but on a smaller scale.
I have one buy to let that probably isn't worth transfering to a company (at least for now) as it would incur CGT / stamp duty.
But I'm looking to buy an additional BTL property and so wondering if its worth putting that into a company at the point of purchase.
On the positive side there are stamp duty savings and tax advantages with respect to the mortgage interest. But I assume to counter that I'll need a larger deposit, harder to get a mortgage and significant on going costs and admin.
However on a £550k property the £16k stamp duty saving looks attractive. Anybody have any experience with putting a first property into a company wrapper... ? What have I missed?
I have one buy to let that probably isn't worth transfering to a company (at least for now) as it would incur CGT / stamp duty.
But I'm looking to buy an additional BTL property and so wondering if its worth putting that into a company at the point of purchase.
On the positive side there are stamp duty savings and tax advantages with respect to the mortgage interest. But I assume to counter that I'll need a larger deposit, harder to get a mortgage and significant on going costs and admin.
However on a £550k property the £16k stamp duty saving looks attractive. Anybody have any experience with putting a first property into a company wrapper... ? What have I missed?
andyb said:
I have a similar question... but on a smaller scale.
I have one buy to let that probably isn't worth transfering to a company (at least for now) as it would incur CGT / stamp duty.
But I'm looking to buy an additional BTL property and so wondering if its worth putting that into a company at the point of purchase.
On the positive side there are stamp duty savings and tax advantages with respect to the mortgage interest. But I assume to counter that I'll need a larger deposit, harder to get a mortgage and significant on going costs and admin.
However on a £550k property the £16k stamp duty saving looks attractive. Anybody have any experience with putting a first property into a company wrapper... ? What have I missed?
Can you show the maths on the £16k stamp duty saving?I have one buy to let that probably isn't worth transfering to a company (at least for now) as it would incur CGT / stamp duty.
But I'm looking to buy an additional BTL property and so wondering if its worth putting that into a company at the point of purchase.
On the positive side there are stamp duty savings and tax advantages with respect to the mortgage interest. But I assume to counter that I'll need a larger deposit, harder to get a mortgage and significant on going costs and admin.
However on a £550k property the £16k stamp duty saving looks attractive. Anybody have any experience with putting a first property into a company wrapper... ? What have I missed?
Its possible I've got it wrong, but simply using this:
https://www.stampdutycalculator.org.uk/
And comparing the 'single' vs 'multiple' stamp duty values.
https://www.stampdutycalculator.org.uk/
And comparing the 'single' vs 'multiple' stamp duty values.
JPJPJP said:
Companies pay the additional rate, even on a single property
Thanks - you are correct:https://www.gov.uk/guidance/stamp-duty-land-tax-co...
Teach me to listen to an estate agent.
Decision then on within a company or not really rests on the mortgage interest tax relief (which is fairly clear) and the implications for disposal / inheritance for which more research required.
andyb said:
Thanks - you are correct:
https://www.gov.uk/guidance/stamp-duty-land-tax-co...
Teach me to listen to an estate agent.
Decision then on within a company or not really rests on the mortgage interest tax relief (which is fairly clear) and the implications for disposal / inheritance for which more research required.
If you are going to only buy 1 more (I.e have 2) I would be surprised if corporate ownership versus personal makes that much difference in the longer term.https://www.gov.uk/guidance/stamp-duty-land-tax-co...
Teach me to listen to an estate agent.
Decision then on within a company or not really rests on the mortgage interest tax relief (which is fairly clear) and the implications for disposal / inheritance for which more research required.
JPJPJP said:
andyb said:
Thanks - you are correct:
https://www.gov.uk/guidance/stamp-duty-land-tax-co...
Teach me to listen to an estate agent.
Decision then on within a company or not really rests on the mortgage interest tax relief (which is fairly clear) and the implications for disposal / inheritance for which more research required.
If you are going to only buy 1 more (I.e have 2) I would be surprised if corporate ownership versus personal makes that much difference in the longer term.https://www.gov.uk/guidance/stamp-duty-land-tax-co...
Teach me to listen to an estate agent.
Decision then on within a company or not really rests on the mortgage interest tax relief (which is fairly clear) and the implications for disposal / inheritance for which more research required.
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