Is this a viable mortgage option?

maudellis

We have two residential properties that have been registered as a limited company since 12th April 2010. They are both mortgage free. At the moment the company is dormant but we are thinking of renting out the flats once we explore the tax liabilities so that we can buy our retirement home. As we are in our early sixties and both retired it is difficult for us to get mortgage as we can only show our limited pension which makes us collateral rich but income poor.

The problem for us is to release some of the collateral value from the company in order to buy our retirement home. We have been advised to seek a commercial buy to let mortgage and live in the property as tenants and pay rent to the company. Thus the company will then rent out the two properties in order to generate repayment of the buy to let mortgage. Is this strategy a viable option given our particular circumstances?

Sincerely Yours

Maud

TrickyDicky101

Any reason why thou don't simply sell the properties? Would there be a big cgt liability resulting?

steve1980

Why don't you speak to your accountant and ask their opinion?

maudellis

I know I can go to the accountant, which I will do, but I was looking on this forum first for a more creative response. It is about finding a way of holding onto the properties without incurring cgt tax and other types of tax.

I came on this forum as it was highly recommended to me.

Sincerely Yours

Maud

steve1980

maudellis wrote: »

It is about finding a way of holding onto the properties without incurring cgt tax and other types of tax.

But this is what you're paying your accountant for!!!!!

If someone gave you advise on here and it all went wrong what would you do?

maudellis

The whole idea of this forum is to give advice!!!! I may or may not act upon any advice given, but I sure would like some.....apart from the obvious "see your accountant".

Seriously, can anyone on this forum give better advice?

Sincerely Yours

Maud

mjdh1957

Really, internet forums like this are a bit like asking strangers in a pub for advice.

Some people know what they are talking about, others just like the sound of their own voice and can give you misleading information, others can maliciously make things up to deceive people.

So, it's not really a source of 'advice' in the same way that a professional accountant or solicitor is.

The value of advice on here is exactly equivalent to the price you are paying for it, ie nothing....

theGrinch

your accountant will (or should) have a better grasp of your assets and liabilities as well as your preferences and allowances and therefore should give you complete advice given the recent budgetary changes.

my understanding is that the govt is now looking at retrospective charges on residential properties inside companies.

mikerudder

I find this particular threat very interesting indeed as I am in a similar situation. I would be intrigued to know more about the Governments plans to retrospective charges on residential properties inside companies. If anyone has more information about this it would be appreciated.
Regards
Mike

Thrugelmir

Why did you buy the properties through a Limited Company?

What was the purpose?


The Company lending you money personally opens up a whole can of worms, tax wise.