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Best way to buy a home in a unique position
Tiyuri
Posts: 1 Newbie
Hi there guys,
I'm a business owner looking to buy my first property.
The property is around £550k in London and I'm trying to figure out the best way to access the money I need to buy it.
The money I intend to buy it with is still in the business. If I take it out all at once I'm going to end up paying a lot of income tax. With that in mind I'm trying to find the most efficient option.
Would it be better for me to get a mortgage? Despite being more than able to afford it outright if I take the tax hit.
Should I just take the money out all at once and bite the bullet?
I also have a friend (whom I trust completely) who is willing to lend me any amount of money I need towards the property at no interest, as long as I pay them back within 3 or 4 years. Is there a way I can leverage that to my advantage? They are also willing to part own the property with me until I buy the property fully.
Any suggestions would be most welcome
Thank you!
I'm a business owner looking to buy my first property.
The property is around £550k in London and I'm trying to figure out the best way to access the money I need to buy it.
The money I intend to buy it with is still in the business. If I take it out all at once I'm going to end up paying a lot of income tax. With that in mind I'm trying to find the most efficient option.
Would it be better for me to get a mortgage? Despite being more than able to afford it outright if I take the tax hit.
Should I just take the money out all at once and bite the bullet?
I also have a friend (whom I trust completely) who is willing to lend me any amount of money I need towards the property at no interest, as long as I pay them back within 3 or 4 years. Is there a way I can leverage that to my advantage? They are also willing to part own the property with me until I buy the property fully.
Any suggestions would be most welcome
Thank you!
0
Comments
-
Is this a Ltd. company? If so, *you* don't own the money in the business, the business does.
Is it just a case of comparing:
- your personal tax liabilities from withdrawing all the money in one go
vs.
- borrowing the money from your friend and your personal tax liabilities of withdrawing over a period of 3-4 years
vs.
- the costs of operating a mortgage for a much longer period and withdrawing the money from your business tax efficiently over a number of years.
?0 -
You can also obviously take money out of the business by paying yourself dividends (less tax for you but corporation tax for the company).
You could also have the company loan you the money, so zero tax for you but potentially corporation tax for the company.
It would be worth discussing with your accountant.0 -
Tax on dividends up to 550k in one go would be quite large.jjlandlord wrote: »You can also obviously take money out of the business by paying yourself dividends (less tax for you but corporation tax for the company).
I think the loans are limited to 5k in one year with no liability.jjlandlord wrote: »You could also have the company loan you the money, so zero tax for you but potentially corporation tax for the company.
Seconded.jjlandlord wrote: »It would be worth discussing with your accountant.0
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