Ltd comp advantages for BTL

crazygaijin

I have 2 BTL`s and am waiting for the prices and interest rates to come down to buy some more in the future.

I have been talking to my accountant about the advantages of putting them all in a Ltd company instead of owning them outright.

I am interested to know others experience and advice on this I know its a complicated area.

Yoshua

My advice would be to go that way as you will I believe have some Tax advantages. I mentioned the idea recently to my accountant and at the time I believed he mentioned I would be hit for corporation tax which I believe is rated at 19% for small businesses. I also feel he said Capital gains would still apply at the lower rate. However if its for tax purposes that you want to do this and minimize your burden he did come up with another idea. Basically he advised me to set up another business which would solely manage my property portfolio and then offset this against my tax liability for the other one.

novazombie

It all depends on your expenses.

If you like me have interest only mortgage then those payments are 100% off the tax liability.

Also you can I believe (Please correct me if I'm wrong) have things like Internet connection and mobile phone contract for the business.

I even wondered about leasing a small van for property maintenance. What would the tax man make of this if I only have 1 or 2 BTL`s at the moment?

Any other good ideas what expenses can be put down to lower the tax liability?

Premier_2

The advantage would be that if it all went belly up, it wouldn't affect your personal assets.

But the disadvantges would be that you would severely restrict your mortgage options. Not many BTL mortgages will allow lending to a limited company. Those that do, may still want personal guarantees, negating the advantage above.
The remaining options would be commercial mortgages - typically more expensive than BTL mortgages.

GDB2222

When I enquired, I was told that any lending to a BTL company would have required a personal guarantee.

novazombie

I know it would require a guarantee, that's obvious in this climate.

The issue is is it worth it, considering everything.

I just want simple books for my self, the Ltd comp is to be handled by the accountant and there are account companies that even have someone be the director for you with legal papers signed to say that you control it but don't own it.

In this case the company is completely separate from you. So if the company buys property off you with you keeping a charge on it, and the company pays you interest only mortgage, then you cant lose anything if the company went under.

You do of course have to have the money to begin with.