Starting a company to rent out my property? How?

Seanymph

the OP is going to take a mortgage out against the property to fund a second property.... The rental income will not be going to either person to need to declare if they run it through a company. The company will collect the rent, take a 'management fee', pay the wife an income, pay for all running costs of itself (electric, computer, telephone line, advertising etc...) - and I'm sure there will be only enough left over to pay through to the OP as the owner of the property to cover the interest on the mortgage that is raised against the property the company manages.

JQ.

Best advice on here has been to get proper advice from an experienced accountant who regularly deals with professional landlords.

I have a client who set up a property company several years ago. He received poor advice at the outset and the tax structure of the company was poor. He only found this out several years later, when faced with an enormous tax bill which almost bankrupted him. The company structure has to be right from day 1, so get some good quality advice. Ask at your local lettings agencies who their clients use.

Do you intend to borrow money at some point? If so, how? You won't get a buy-to-let mortgage and I can't see any banks lending to a limited company with a single asset, no other sources of income, and where the director has no experience of property investment. Property investors with 25yrs experience are struggling to get finance at present and at best are getting 50-65% LTV's.

antrobus

Vincenzo wrote: »

You can off set interest on loans up to the value of the property when first let, regardless of where/when they are secured.

JQ. wrote: »

you can offset borrowings on your own house for the purposes of minimising tax on the buy-to-let.

Err, no you can't.

Look it up on the HMRC property income manual if you don't believe me. As in;

"interest payable on loans used to buy land or property which is used in the rental business, or on loans to fund repairs, improvements or alterations, is deductible in computing the profits or losses of the rental business"

http://www.hmrc.gov.uk/manuals/pimmanual/pim2105.htm

Thus if the loan hasn't been "used to buy land or property which is used in the rental business" then you can't claim it back as an expense in the rental business.

RabbitMad

I see your

antrobus wrote: »

http://www.hmrc.gov.uk/manuals/pimmanual/pim2105.htm
.

and I raise you a
http://www.hmrc.gov.uk/manuals/bimmanual/BIM45700.htm

JQ.

antrobus wrote: »

Err, no you can't.

Look it up on the HMRC property income manual if you don't believe me. As in;

"interest payable on loans used to buy land or property which is used in the rental business, or on loans to fund repairs, improvements or alterations, is deductible in computing the profits or losses of the rental business"

http://www.hmrc.gov.uk/manuals/pimmanual/pim2105.htm

Thus if the loan hasn't been "used to buy land or property which is used in the rental business" then you can't claim it back as an expense in the rental business.

If cash is used to purchase a BTL and the purchaser has an outstanding mortgage on their own home, then they are using that loan to purchase the BTL and it can be offest for tax purposes.

If you are a landlord, you need to sack you accountant and get a proper one.