Search the Community

Hi All, I've been listening to R&R for a couple of years now but first time on this forum. Hopefully I can get some help. I live in London in rented accommodation and have just bought my first property £65k) in Scotland through a limited company set up with a friend. I'm concerned that by purchasing this property I may now be impacted by the new stamp duty surcharge of 3% when it comes to buy a property for me to live in. Assuming this will be in London would mean that it would cost me a min of £10-15k in tax which would spoil the benefits of my limited company investment. I asked a solicitor, and accountant and a mortgage broker for their advice and they all said that they "believe" I would not be impacted, but then I heard a tax expert on the property podcast (ASK121) say that the surcharge would be applied in this case. Not sure why I can't get a straight and definite answer from any of these advisors. Sorry for the long message but can anybody confirm or deny if the surcharge would be applied on my first time personal purchase if I already have a property through a limited company? Has anybody been in this situation who could share the ecperience? Thanks! Ricardo

Hi all, Whilst not new to the BTL scene, this year I purchased my first property inside SPV / Ltd Company and as I approach the final quarter of the company accounting year, it is about time to find an accountant to take on the new area of end of year filing activities!! I would like to consider myself pretty savvy in general numbers and tax game having filed my personal SA returns for many years but the company accounts games is a whole new story that I am looking for help with. I would be happy to do my own double entry bookkeeping and provide my chosen accountant with access to my online books from which to do these annual tasks - or if they prefer to operate a different way, I am open to discussion. I have had a few sensible quotes (and a few silly ones) when researching "general" accountants at the start of this journey but before I take a decision in this fairly niche market, I wanted to post here looking for recommendations of accountants known to operate in SPV/Ltd Companies. I live in Hampshire but I am as happy working with a nationwide accountant as I am a local one. Any help would be much appreciated guys with this my first post within the property hub network. Feel free the message me or reply on this thread. Thanks in advance. Dean

Hi, I am thinking of structuring some BTL investments in a UK Ltd company in which one or more shareholder would be an ex-pat and one or more shareholder would be a UK resident. If this was the case and we wanted to apply for a mortgage then which should it be - an ex-part mortgage or a Ltd company mortgage? I am hoping it would be possible for a company like like this to apply for a Ltd company mortgage. Or would there be more advantages to an ex-pat mortgage anyway? I assuming that it is the status of the shareholders that would be germane to this, but also wondering if, in fact, it is the status of the directors that matters? Thanks in advance.

Hi, I'm an IT contractor working through my own limited company. This company has surplus profits from which I would like to invest in property. I've been advised by my accountant to set-up a new LTD company to do this with. I've been advised that I can then loan money to the new property investment company from my existing limited company. Does anyone know whether I need to produce a formal loan agreement for this? My accountant has said no , but that doesn't feel right to me. Surely the particulars of the loan would need to be documented, even if I am owner of both companies? Thanks, Jit

Hi all, Any nuggets of wisdom greatly appreciated! I'm due to file first accounts soon at Companies House on new Ltd Company set up for purchase of an off plan property that has experienced years of delay. I intend to use the deposit as a director loan. 10% was put down on exchange in Aug 2018, balance due on completion, estimated May 2021 Question is around how to record that as a loan: On purchase? On accounts now, dated to exchange? Also, as since company set up end 2018, there's been no other transactions, can I file dormant company accounts? Thanks in advance, Michael

Hi fellow property guru's, Newbie here looking for some advice. I'm looking at setting up a SPV Ltd company to invest in some properties, initially I'm looking to flip a few and then build a BTL portfolio. My question is; If I purchase a property under a Ltd Co and personally do not own a property in my name (never have), then later purchase my first property in my own name to live in. Would I still be classed as a first time buyer and get the Stamp Duty (SDLT) Relief on my personal property? Eager to find an answer to this so I can begin my property journey... Thanks in advance for all your advice!

Hello all. I want to understand the best way to setup a limited company/companies structure with my wife that will provide flexibility for structuring income in the future and legacy planning as well. In terms of IHT, I've heard about assigning freezer shares to children or a trust, but as these are very long term plans (don't currently have children) i want to have the flexibility to do this in the future but maybe not right away. I plan on buying and holding resi and commercial properties (potentially mixed use). However, i may down the line look at serviced accommodation which i believe is classed a trading business and therefore has other tax benefits. So, it would be great to get some ideas on how to best structure this taking into consideration income tax, CGT and potentially IHT in the future. Many thanks

Hi My wife and I are in the process of starting our portfolio with 2 BTL properties. I pay income tax at the basic rate and my has no income at the moment. Would it be better to own the properties in a limited company at this stage or keep them in our own names until we add more properties? Thanks WS

Hi everyone, I am buying a property using a limited company. The limited company is set up but I need to open a bank account (this is a lender requirement). I am an expat and am the sole director of the company. Any advice on decent business accounts - low fees, online banking and most importantly available for an expat! As always, any advice gratefully received. Cheers, JJ

Hello I would like to change the name on my property deeds from my individual name to my new company name (SVP.) I have spoken to my accountant about the tax related concerns which he is arranging (re capital gains etc.) The next step is to transfer the name of the deeds. I do not have a mortgage on the property. Can anyone recommend a lawyer who can do this for a reasonable fee ? Thanks

Hi all, my partners and I are going in to the "flipping" and want to set up a limited company to do this, but I can't find if an SPV limited company is suitable for investors who want to flip/renovate properties to resell, rather than just buy to let. Do you have any ideas please gang? Many thanks in advance.

Hi good afternoon everyone, Name is Paul and I've been in property since 2011. I started by renting out and managing my property myself, becoming NLA accredited and have moved to a more passive strategy using a managing agent. I've enjoyed all aspects and have now built up 4 properties. I still manage one of them but as I live 300miles away the remainder are fully managed by a local letting agent. We are a married couple and my wife is no longer a 40% tax payer for the foreseeable future (actually her earnings will be less then 3k) but I will remain a higher rate tax payer. We currently owm our properties with the following ownership structure: 2 in higher rate tax payers name. 1 lower tax rate payers name. 1 in joint names with the intention of getting a declaration of trust and form 17 for more favourable rental income benefits. We are also looking to purchase two further properties in the next 6 month's. My intention is currently to use a DoT for the 2 properties currently held in legal ownership in my name and for the one in joint names to bring the beneficial ownership to 1:99% in favour of lower tax payer. Can anyone confirm that a deed of trust is valid for transferring beneficial ownership in these ownership circumstances? There's a lot of conflicting information online but this seems to be the best solution for us until we can incorporate using the rules of property partnership to minimise SDLT and CGT. Thanks,

I’m a newbie here and have had one B2L for a few years under personal tax. I’m now moving it to a limited company and looking at mortgages. The B2L is worth £299k with a mortgage of £176k. I earn £51k pa. My IFA states the best limited company repayment mortgage rate is 3.19% for 2yrs or 3.64% for 5yrs. I’m not sure if this is high? Any help or advice would be appreciate.

Thank you in advance for any advice or pointers to this grateful newbie. I have a few queries how I should take ownership of a property. The property was owned by my late father for 30+ years. The ground floor is a vacant commercial unit with the upper floors forming a maisonette currently occupied by tenants. I have submitted the paperwork to the Land Registry to transfer the property into my mother’s name as probate just been granted. My mother would like to gift the property to me: I need help to consider all the options. 1. I understand this can be held in my name or can be transferred into a limited company where I am a shareholder. There may be other options I am unaware of? If a limited company structure is chosen, I understand I can leave the rent in the company and only withdraw dividends when necessary. This appeals from the perspective of timing when I pay income tax, as I draw dividends from my own limited company. I imagine my children can also draw dividends from the company should they become shareholders in the future. They are very young so this is forward planning! 2. I would like to let the commercial premises on the ground floor of the property. Does having the property in a limited company structure limit my personal liabilities? 3. Does it also make it easier to sell the property in the future? 4. The company option also appeals to me from an IHT perspective, as I may be able to easily leave the company shares to my children in my Will - is this correct? I believe no SDLT is payable as my mother is not selling the property to me. I imagine CGT will be zero if my mother passes the property on to me within weeks of her taking ownership of the property. There is also an IHT point to consider. My elderly mother would be making a PET to me, which I recognise will fail if she does not live for seven years. 5. Is there a way for her to transfer the property to me where IHT can be mitigated in a shorter timeframe? Thank you very much for any advice.

Hi All, I am new to property investing and looking for some general advice early on in my property journey. My sister and I have £1 million in cash to invest and would most likely look to do this through using a limited company as a SPV. We both have limited time available to dedicate to property investing - I work long hours in a full time job and my sister is looking to set up her own non-property business. Ultimate personal goal: Ensure financial freedom, so I have enough passive rental income to quit my day job and and set up my own (non-property) business. General strategy: Diverse portfolio to minimise risk - aiming for a mixture of capital growth and rental income properties. Initially invest in professional lets with no renovation required due to minimal free time. Eventually want the option of expanding to HMO & holiday rentals when (hopefully) we have more time to dedicate to our property portfolio/business. We are first time buyers who live in Yorkshire and therefore would like to invest locally where possible, with an example portfolio shown below. Location Price No. properties Total mortgage value Total cash deposit L:V Goal London £500,000 1 £375,000 £125,000 75% Long term capital growth Leeds £100,000 6 £390,000 £210,000 65% Rental income Manchester £100,000 6 £390,000 £210,000 65% Rental income York £200,000 3 £390,000 £210,000 65% Capital growth Our eventual goal is to achieve a net rental income of £10,000 pcm. ~~~ Obviously we are very early on with regards to developing our strategy. In the next 6 months the aim is to purchase our first 2 BTL properties in/around Leeds. We aim to refine the specifics over the next few months and i'm sure our strategy will evolve to include more 'exciting' investments (HMOs etc) as we gain experience. I was wondering whether: 1) The general feel of this portfolio makes sense to more experienced investors out there? 2) Are we being too ambitious or too cautious? 3) What are the major strategy decisions we should make now before starting our journey Any feedback would be greatly appreciated. Kind regards, Johnny W

Hello, I would like to start building up my portfolio of rental properties in an SPV format. I am keen to start contacting mortgage advisers to look for the best limited company BTL mortgage rates. Does anyone recommend a good mortgage advisor with experience of helping a newbie get into the market ? Thanks Camilla

Hi everyone, I'm looking at starting with investing in property and would be grateful for some advice. I'm hoping to build a (hopefully) decent revenue stream and generally to hold properties as long term assets. I'm a seafarer and so HMRC wipe off my tax each year under the Seafarer's Earning Deduction. This means I still have my £12.5k tax free allowance to use each year. I don't currently have a house of my own as I'm out of the country a lot either working or travelling and so stay with my parents. I also don't have any real need for a house at the moment but hope to have one on the future. I was looking into setting up a limited company to preserve my FTB status and so in the future (as I don't want to work at sea forever!) I would be able to draw the money as efficiently as possible. Additionally whilst I don't have any problem with buying and letting a property in my own name it seems to me if I want more than one (which I'm hoping to) then a limited company is the way to go. My main questions are these; 1) What setup with regards to pay and releasing money from the limited company would be the most tax efficient and what do other people in similar positions do? 2) I have money to invest via a director's loan to the company, I've seen a few things online relating to a £10k figure. I'd just like to confirm that this relates to the company lending me money only and that I can release these funds tax free at a later date. 3) I intend to pay myself a salary as a director and possibly to charge interest on the director's loan to take advantage of my unused tax allowance. As I will not initially have the funds to remove from the business until I begin letting my first property a debt to me will build up. Is this an issue when applying for future mortgages? Also what is the maximum percentage interest allowed on a director's loan to the company? Additionally, a side benefit to taking a salary from the company is that because of the SED mentioned above I also do not pay National Insurance so having a salary would work in my favour and pay into that too. 4) I don't actually need access to the company revenue now as I'm intending this to be an investment for the future only at this stage with the potential for reinvesting profits. Can I write off all my corporation tax by putting any profits into a pension plan for myself each year? The only limits I could find online was £40k/year. Is this limited in any other way? Particularly if I have a low/no salary as a director. I appreciate that some of these questions might be better answered by an accountant but any information would be greatly appreciated. Many thanks in advance! Sam

Hi Property Hub Wondering if you could help me. I'm looking to buy a property with a limited company - I know you pay the 3% surcharge on stamp duty - but can you claim that back if the property sells within 3 years? As is the rule when purchasing as an individual. And could you point me in the direction of any resources on the subject? I'm struggling to find any definitive answer online. Thanks! Durian

Hi, I own a limited company which is no longer being used. I want to take the money in this business and transfer it to a new company for property investment, and then close the original company. I have already paid corporation tax on the money in the original business. Is there additional tax to pay when I transfer it to the new company? Or can I just transfer all of it without being taxed? Thanks, Emily

Up to now I have successfully self managed my property affairs without the need for an accountant. I now come to submit my first CT600 for my property company (for its first full year). I have come across the following obstacles on the HMRC web site after I logged on for my Property Co.: Unable to submit rental income more than £5200 per annum Property expenses cannot exceed the rental income My rental income in the first year is more than £5200 (good) but I also had a lot of expenses so I made a loss in that first year Please can anyone help with how I submit my Corporation Tax return in this situation and other people's experience? All of the accountants I have asked have just said that I need to come to them and use 'software'. Surely having come this far I can get it over the line somehow in a cost effective manner without needing to pay for additional services that I do not need Other people's experiences who have not reached for an accountant to do it for them would be most welcome. Regards

Hi Guys!! I'm starting my property journey and will be buying my first buy to let in the next 6 months. I'm planning to have 2 properties by the end of 2020, and aquire 10 properties over the next 5 years (roughly 2 per year). However I need to speak to a good accountant before setting anything in motion. I'm based in London but will be buying my first properties in Manchester. As the Property Tax service is currently full, could you please recommend some good quality property accountants or point me towards some resources? Any advice from this fantastic community would be greatly appreciated! For those of you going to the property meetup in November 7th in East London, see you there!! Clem

My partner and I (both 30 years old) have some savings and are looking to start investing in property for the long term cash flow to eventually replace our income. We currently own no property and are tenants ourselves. We want to skip buying our own house and get straight into investing. Q1) would we still benefit from First Time Buyer stamp duty deductions if we were to; A) buy to let? B ) buy through a limited company? Q2) I’m assuming we would need a first time buyer, first time landlord mortgage - can we get this through a limited company? What you've done in property so far Nothing just yet. Just been building a foundation of knowledge and learning all I can through podcasts, reading, and a few meet ups. Q3) I have spoken to lots of people who have found value in paid for courses - are there any you’d recommend? What areas you invest in (or want to invest in? Currently living in Hertfordshire where property prices are out of our budget so looking further north. (Manchester, Leeds, Sheffield, Nottingham) My next steps in my education is to pinpoint one of these cities, learn it well (online research, visiting), and then target 1 city for investment. I know they say invest in an area you know, but we want to get started, and having property at least in 1 city further afield seems easier than having multiple properties over numerous cities. Thoughts? What your plans are for the future Looking at BTL to put my learning into practice for the first few and then moving on to HMO’s as I build confidence. We want to have a portfolio in 10 years which will allow us to retire from our jobs (currently 30 years old). Thanks for reading. If anyone has any advise or input on anything, it would be great to learn from your input. I look forward to reading your responses. Ben

Hi Folks, I would welcome any feedback on my current situation. I am looking to purchase a holiday let property in the UK through a limited company. Looking at Limited company mortgages in general, they typically offer somewhere in the range of 75%-80% LTV. To fund the remaining 20-25% I could remortgage my property. I was thinking that I could lend the money to the limited company and the income generated would help pay for remortgaging. Is this the typical way for company mortgages to be set up? What are the downsides to this arrangement? Are their better arrangements for funding the remaining 20-25%?

Hello All! Over 2019, my partner and I have been educating ourselves about property and all the ins-and-outs of BTL. We have managed to save £30k, and now we need to take the leap of faith and actually start DOING some investment!! I'm the kind of person who has to have a clear plan of action, and I'm really struggling to nail down the process to purchasing our first BTL. After many discussions and considerations, we have decided that buying property as an SPV Ltd company will be the best option for us (both in terms of tax implications, and long-term goals). We would be so grateful if anyone could offer any advice on what order to complete the following steps in: - Set up a Ltd company (Side note - how have people found is the best way to do this?) - Get a mortgage-in-principle (Is this possible for Ltd companies before finding a property?) - Put an offer in on a suitable property - Set up a separate bank account for the Ltd company (Can this be a standard bank account?) - Any other step in the process to purchasing your first BTL as a Ltd company that we have overlooked! Any advice would be very much appreciated! Thank you in anticipation, Hayley and Steve

Hey guys! New to the forum, would be really greatful is someone could help me out as tax is a confusing issue even to the experienced landlords in here you can imagine how difficult it is to a newbie. My question is in regards to owning property in a ltd aswell as in my personal name. I currently earn a salary of 35k and have just purchased my first buy to let which will push me up to around 41k on paper, I’ve worked out I could buy another in my own name before reaching 40% tax threshold. my plan is to start a ltd company after this and buy any further properties through the company but keep the original 2 in my own name as they won’t be liable for 40% tax. Is this viable or are there any key points in missing? any help is massively appreciated. thank you sean