Semi commercial mortgage - independent advise please

magsymac

Hi I'm new to forum and mortgage jargon so I will need help with acronyms/abbr.. etc!!
My husband and I run an ecommerce mail order company and are looking to relocate the business to a Scottish property where we can also live (we currently live in Scotland & rent both business & our home separately), We have found a small holding (3 acres) which has been used for agricultural purposes. It has large outbuildings which would be ideal for warehousing which is our main business need.
I have spoken to local authority and was told to apply for a certificate for change of use. Regards mortgage we can't apply for residential as our income isn't enough - however our business is very healthy and a semi-commercial mortgage seems the way forward. We have a 30% deposit available. We really need advise from a good independent commercial broker - any suggestions please? many thanks.

holly_hobby

I assume you leave your net profit in the business to minimise tax, if you don't have sufficient income but your business does ?

Either way, as you are aware, this will be semi-commerical borrowing, given the split use.

So, initially try your own business bankers (generally no fee for general advice) for a feel as to whether they consider (given their relationship history with the business/you) if there is sufficient status to purchase - you should also liaise with your accountant, as to the taxation implications for you in residing in a property owned by the buisness (technically this is a benefit in kind, if less than market rent is paid to the company). Together with issues regarding corporate creditors, and if you later want to voluntarily wind the business up or go into liquidation - given that the dwelling will be an asset of the company, and you would therefore have to pch the property from the buisness in order to remain there. Other issues are that upon sale of the dwelling, any gain (less corporate reliefs) will be exposed to coproration tax and will not attract any Private Residence Relief - your accountant should be able to discuss all this, and other taxation/finance factors that should be considered, with you.

Ensure there are no agricultural ties/restrictive covernants on the farm - as this will cause issues, along with farily confident confirmation of change of use, as pointless if you can't use as reqd.

If your bankers are not much help, or you want to try and better any rate offered, a commerical broker will assist. Their fee will generally be chargeable whether eventually placed or not, given the amount of work typically involved in sourcing suitable providers, and taking it onwards when found - again try your accountant for a referall, along with more traditional sourcing routes.

Hope this helps

Holly

magsymac

Thank you so much Holly for the advice very much appreciated and very useful. I will take this up with our accountant first & foremost. Our bank will not lend unless its a personal mortgage due to split use - hence request for advice on independent commercial advisors. Thanks again.