Buy to Let - Ltd Company or not?

lindy8

I currently have 3 properties which I own mortgage free and am now considering buying some more property by raising a mortgage on one of them either to fund one extra property, or use the funds raised as deposits on several properties. Does anyone have any experience in this area and does anyone know if it would be advantageous to set up a Limited Company to make the purchases?

Han_naH

I asked this question on another forum (may I say: fool.co.uk Property and tax boards). Apparently there are no tax advantages in renting property through a Ltd Co and as I remember there were disadvantages in terms of ownership.

deemy2004

My brother has 11 properties ! and he saves big time on giving the profits out as dividends to his wife !

On top of that their are all the business expenses, which is virtually any expenditure.

I'm sure they must be some drawbacks, though I don't see much. Maybe when he comes to sell there are complications ?

yonk

I think the dividends thing is the subject of Gordon Browns recent attention. You might want to check this out.

TomH_3

definate benefits of using a ltd.

particularly if buying and selling property (trading) or if your portfolio is of real scale and so the income goes far beyond your annual allowances and you're paying 40% on it.

using an ltd you pay 19% on profits up to 300k.

always worth talking with an accountant first as they will advise for you unique situation.

bjmaca

Lindy8,

I personally have a large property portfolio myself along with my wife. We do it both ways we have some personally and also some through an LTD. The personal ones we do as a trading as business as it is easier to control when all of the property stuff is kept together.

I have a lot of experience in purchasing and negotiating deals on buy to let. We started the same way owning the house then remortgaging to make the most of our funds. Leverage the cash from the house and you can buy several properties at the same time. As long as they are positive cashflow then you are a winner. Alsways make sure that you allow for mortgage increases as well as all of those unexpected expences.

As for tax there are a large number of ways to legally us the taxes to your advantage but the best bet is to seek assistance from a professional tax person and see whatis best for you.

PM me if I can help anymore

BJMACA