Purchased Property with 2 Friends and thinking of Forming Company

sarah_0901

I recently purchased a property with 2 friends as an investment. We were thinking about forming a company. I was just wondering if anyone knew how we would go about doing this and what it would require/cost. What are the advantages/disadvantages? Thanks for your time

Linton

sarah_0901 wrote: »

I recently purchased a property with 2 friends as an investment. We were thinking about forming a company. I was just wondering if anyone knew how we would go about doing this and what it would require/cost. What are the advantages/disadvantages? Thanks for your time

Suggest you try the House Buying/Renting forum - you will find landlords there.

One perhaps not very helpful thought - shouldnt these sorts of details have been sorted out before you bought the house together?

grey_gym_sock

it depends partly on the tax status of you and your friends. but a company's not generally great for property, because the company pays tax (corporation tax is currently 24%) on its profits (rent minus expenses; also, any capital gain when selling the property), and then you *may* have to pay more tax on any cash you take out of the company (though not if you pay yourselves a dividend and you are not - even including the dividend - liable for higher rate tax).

if you have a mortgage on the property, the mortgage company would have to agree.

if the property is liable to stamp duty, you'd pay it again on transferring it into a company.

xylophone

I hope you have a formal agreement in place as to what happens if one wants to sell and the others don't.

If you are renting out the property be sure that you comply with all the rules and regulations, have the lender's consent and the appropriate insurance in place.

Freecall

If you move it (sell it) to a company, I would have thought that the acquiring company will be liable to pay Stamp Duty (unless it is a very cheap house of course).