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  • FIRST POST
    • ptrichardson
    • By ptrichardson 6th Mar 17, 12:48 PM
    • 199Posts
    • 67Thanks
    ptrichardson
    Buy to Let, Let to Buy and Limited Companies
    • #1
    • 6th Mar 17, 12:48 PM
    Buy to Let, Let to Buy and Limited Companies 6th Mar 17 at 12:48 PM
    Hi folks,
    I have a bit of an unusual situation, at least it is to me, and was hoping for some guidance.

    For better of worse, I owned a house with a friend that we had planned to sell, but due to the crash in 2008, we were unable and it ended up being rented since (except for one year where I lived in it after selling one house and later buying and renovating another).
    Its on a residential mortgage, which has never been ideal.

    Right now, I'm at the last stage of "buying" this house off my friend and having myself and my wife as owners.

    Once that bit is done, I want to remortgage it again, but as a BTL.


    That's not too hard, only I'm going to be stung with the 2nd house stamp duty on the transfer of equity / initial remortgage, which is going to be about £2000


    That's not too tricky so far. But....

    I want to move house - and I really don't want to sell the house I'm in - I want to rent that out too. Then I'll have 2 houses. The start of plan to change careers in the long term, or at least a great top up on my pension.

    So its another BTL mortgage on my current home.

    Then I'll be buying another home to actually live in. As I understand, it'll be THIS 3rd house that I'll have to pay 2nd home stamp duty on , so it will cost me about £7000 (including normal stamp duty), which is harsh but thems-the-rules I guess.


    So I'm about £7000 down on 2nd home stamp duty.

    I'm a higher rate tax payer, so I'm going to be paying 40% on the profits from the rent.
    And I don't actually need the rent in my hand - Its more of a long term investment. Ideally to be saved until I have a 25% deposit for another house to rent etc etc until I have 5-6 houses. I wouldn't expect to take anything out of the company except expenses until I retire/ quit working in IT.


    Seems to me like I'd be better off forming a limited company, transferring both rental houses into it.
    Then I'd be able to claim back the £7000 in 2nd home stamp duty charges - although about £1500 would probably be lost to conveyancing costs

    Any thoughts? Am I mistaken in anything I've suggested?

    I was self-employed until recently, so I'm familiar with running a limited company

    Is it any more difficult to get a mortgage for a limited company than it is as a personal BTL mortgage? More expensive?

    Will most all-of-market mortgage brokers have access to both sides?

    Thanks for reading.
Page 2
    • Crashy Time
    • By Crashy Time 7th Mar 17, 1:33 PM
    • 5,025 Posts
    • 2,163 Thanks
    Crashy Time
    With the government already cosying up to corporate investment with their housing white paper, cutting the tax relief on borrowing for limited companies would seem counter intuitive.
    Originally posted by MyOnlyPost

    It could be done in a way to discourage small landlords though?
    • Crashy Time
    • By Crashy Time 8th Mar 17, 2:43 PM
    • 5,025 Posts
    • 2,163 Thanks
    Crashy Time
    That's how I saw it. Seems pointless now anyway.

    As per usual, by the time I'm in a position to do anything, the older generation have raped it to bits and new legislation has been put in place to nerf it for the rest of us.
    The irony being that this was a plan to fix my pension, since the older generation have !!!!!!ed that up for us too with their ridiculously big pensions.
    Originally posted by ptrichardson

    Any good news in the budget?
    • MyOnlyPost
    • By MyOnlyPost 8th Mar 17, 2:56 PM
    • 1,514 Posts
    • 1,023 Thanks
    MyOnlyPost
    It could be done in a way to discourage small landlords though?
    Originally posted by Crashy Time
    The government can get away with differentiating between limited companies and private landlords as they are different types of investors.

    Legislating to differentiate between limited companies based on their size or the age of the company would be anti-competition
    It may sometimes seem like I can't spell, I can, I just can't type
    • MyOnlyPost
    • By MyOnlyPost 8th Mar 17, 3:04 PM
    • 1,514 Posts
    • 1,023 Thanks
    MyOnlyPost
    That's how I saw it. Seems pointless now anyway.

    As per usual, by the time I'm in a position to do anything, the older generation have raped it to bits and new legislation has been put in place to nerf it for the rest of us.
    The irony being that this was a plan to fix my pension, since the older generation have !!!!!!ed that up for us too with their ridiculously big pensions.
    Originally posted by ptrichardson
    Oh dear, how bitterly twisted you sound.

    My dad is one of that older generation, he worked 20 years down a mine. I think he has earned a decent retirement.
    It may sometimes seem like I can't spell, I can, I just can't type
    • Crashy Time
    • By Crashy Time 10th Mar 17, 3:38 PM
    • 5,025 Posts
    • 2,163 Thanks
    Crashy Time
    https://www.theguardian.com/money/2016/dec/10/buy-to-let-landlords-vilified-lending-crackdown-tax-hike-profit-loss
    • Crashy Time
    • By Crashy Time 20th Mar 17, 11:06 AM
    • 5,025 Posts
    • 2,163 Thanks
    Crashy Time
    The government can get away with differentiating between limited companies and private landlords as they are different types of investors.

    Legislating to differentiate between limited companies based on their size or the age of the company would be anti-competition
    Originally posted by MyOnlyPost

    They always find a way to tweak things if there are votes in it IMO.
    • ptrichardson
    • By ptrichardson 22nd Mar 17, 3:20 PM
    • 199 Posts
    • 67 Thanks
    ptrichardson
    Oh dear, how bitterly twisted you sound.

    My dad is one of that older generation, he worked 20 years down a mine. I think he has earned a decent retirement.
    Originally posted by MyOnlyPost
    Hadn't been coming back to check on the thread as I had my answer some time ago. Thanks all for that.

    And yeh, I am a bit bitter. I'm earning roughly the same as my dad, for example. And I've worked out that despite me putting more into my pension, I'm going to get about 25% of the payback that he got.

    Its quite annoying.

    My grandad was a miner, so you don't need to lecture me on who has earned what. You can cherry pick any situation to match your personal view. Just like I just did.
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