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Found 12 results

  1. I'm about to purchase a new primary residential property for myself, as a cash purchase for now but potentially re-finance at a later date if needed. One of the standalone buildings on the property will be an office for my business. Are there any benefits to purchasing the new property through a limited company? Or will it just create a BIC to me for living in the property owned by the Ltd/LLP?
  2. Hello, I am a new investor and understand you can take £3k out of your limited company into your personal name / year tax free as a dividend. I have three questions relating to this. 1. really I would like to continue building money within the company to invest in further buy to let properties. Therefore is it possible to take the £3k from rent/ year and immediately re invest the money as back into the company so that you could take a tax free lump sum in the future as this would in effect be your company returning the money you lent it? Ie. The same as you can remove your initial deposit tax free 2. If there is another person with significant control who owns the other half of the company can they also take £3k as a tax free dividend and probably in a similar way? 3. What paperwork do you need to show to do this? Is it a letter from the director to the share holder to say the terms of the loan and so on? Thanks very much for any help that you can offer!
  3. Hello, I apologise if this has been asked before. I have a property (owned personally) which is currently on a BTL mortgage which is to be refinanced. The tenant is moving out but I wish to now start a service accommodation business through a limited company. Can I use a commercial lease to rent this property from myself? If so, what mortgage do I need, would a BTL mortgage suffice with a guaranteed rent from the (my) limited company? Any tips would be appreciated and welcome! Yvonne
  4. ----------- Context -------- I have a BTL property owner jointly under me and my wife's name. We both are high rate tax payers and thus paying considerable amount of Tax on the rental income. We want to 1) Take out equity from this property to invest in future purchases. We have almost 40% equity currently 2) Move the property into some sort of Company structure when we remortgage it in end of April 2021(Hoping that the SDLT relief will be extended). As the early payment-charge on existing mortgage deal make it impractical to purchase through company currently. 3) We want to be in a position to extract our initial capital we put into the properties without Tax down the line AND we will be reinvesting all cash flows back into the properties. It is not needed for out living expenses currently. -------- Questions -------- Can you help help guide me in answering the below questions 1) How much would it cost to get professional advice on forming the company and moving the existing property into it. I mean the fee this company will change for doing it all on my behalf and what services does this fee cover. I understand that i will have to pay 3% SDLT, solicitor charges etc. 2) Suggest a Property-Tax expert who can develop the best strategy for the company-structure for our circumstances 3) I have read that simply forming a company with standard-shares for this purpose might not be the best idea from Tax-planning, Inheritance-Tax point of view. Is that true ?? Thanks
  5. Hi All New to this site and Property but wondered if you might be able to offer some more insight to my 2nd home situation. I own a flat which i want to change to a BTL. Using some Equity and combining my income with my partners we will buy a second home to live in. My Broker suggested selling my flat to my own (new) Limited company as a way round the Stamp Duty on our new purchase. But she also said to check with my Solicitor to make sure the Company wouldn't have to pay SDLT, or indeed us. I am not looking to draw an income on the BTL yet so am happy for the profit to sit and grow, using it occasionally to pay maintenance etc so i think my dividends tax would be minimal. I also don't think the income would push me out of the Basic rate tax bracket. This would be my second ltd company though. Are there any major red flags i should be immediately aware of? Thanks for your help Felicity
  6. Please help: Cladding prisoner looking for cost effective way to move house! Background: Currently I own a flat (Leasehold) in East London and live there with my partner and our 8month old son. It was purchased off plan in 2015 and we have lived in it since construction was completed. Last year we tried to do an equity release on the flat to fund an onward purchase and were told by the lender they couldn’t do this without an EWS1 form. We lobbied our Freeholder (Peabody) and 8 months later the block recently had a Fire Safety inspection for an EWS1 Form and received a B2 rating, meaning that remediation is required to make it EWS1 ‘compliant’. Whilst remediation work remains outstanding, no lenders will lend against the building. This means leaseholders are unable to sell their properties to prospective buyers who require a mortgage to complete a purchase essentially rendering Leaseholders mortgage prisoners. If we are to believe reports in the press, these issues will take years to remediate (5+ years), meaning we are unable to sell our homes until they are remediated. The building is not ACM clad, and the scale of the remediation work that will be required is unclear since the Freeholder (Peabody) is withholding the Fire Safety Report accompanying the EWS1. The Freeholders justification for withholding the report is that it is subject to ‘legal privilege’ as they are pursuing the Developer (Bellway) for the costs of remediation on the grounds of a ‘design defect’. This is a contentious issue, as leaseholders believe the report is not subject to Legal Privilege. Currently, Leaseholders have no visibility on how safe their flats are to live in nor any visibility of potential costs of remediation that may ultimately passed on to them by the Freeholders. Reports in the press state these could be as high as £75K per leaseholder (source p64: https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/901877/Draft_Building_Safety_Bill_Impact_Assessment_web.pdf Upon receipt of the failed EWS1 a ‘waking watch’ was installed in the building, costing £8k/per week. At this stage it remains unclear whether the Freeholder or Leaseholder will cover the cost of the waking watch. There are 58 flats in the block so the implications are severe. Proposed solution & questions We are a young family and are looking at the most effective way to move house working around the current constraint where we are unlikely to be able to sell our flat for years. Since we currently own the leasehold on the flat, if we try to purchase a further property we would be subject to the second rate stamp duty. Given it could take years (potentially 5+ years) lenders will lend against the flat and we would be able to sell it, there is a risk that if we were make an onward purchase we would not be able to reclaim the excess stamp duty on our second purchase. This would mean that we’d be paying this second home stamp as well as being on the hook for remediation costs for the building. There is also the additional risk that Rishi Sunak introduces CGT on property next year, so any remaining capital gain on the flat would be eroded. One option we are considering is selling the East London flat we own to a SPV Limited Company so that we are not subject to 2nd home stamp duty on our onward purchase. We would look to sell the Flat to the company at a value reflective of the fact the present value of the flat is far below the value of a comparable flat with a fire certificate. We understand the company would pay 3% Stamp Duty on the purchase on amounts <£500k in value. Other questions: Ø Would selling the leasehold to the SPV Limited company (owned by me), enable me to pursue an onward purchase with my partner without being subject to 2nd home stamp duty? Ø Does anyone know any other costs associated with running the SPV Limited Company? E.g. annual charges that we would be subject to that we might not be subject to if the property was privately held. Ø Are there any cost considerations we should take into account? Grateful for anyone that can provide any help guidance here. Would also be interested in speaking to anyone else in a similar position, ie trapped in home due to cladding legislation. Thanks in advance
  7. Hi all, hve a very quick question; I am planning to lend some money to my own limited company (zero interest) to buy a BTL. I believe this is called director’s loan so that my limited company can pay it back to me in the future without any tax implications. My question is, do I need to fill any standard forms to establish this loan relationship between my self (director) and my company? thanks in advance volkan
  8. 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
  9. Hi all, Does anyone have experience of paying salaries from a Ltd company? I would like to pay my partner a small salary for her contribution to my BTL business. I am not based in the UK, but the company is. I would like to pay, say £5,000 p.a. Are there any implications to consider? Should I appoint her as a director? I will discuss this with my accountant, but would be good to hear any other experiences. Thanks JJ
  10. With two business partners we are setting up a LTD company with the aim of building a BTL portfolio. We are want to know if dividing the portfolio is a possible exit strategy. I assume this would mean the company would sell 1/3 of the properties to the leaving shareholder and the sale will be taxed on Capital Gains and Stamp Duty. Is there a practical strategy we can implement while structuring the LDT that would help us avoid taxation later? I was thinking of an ownership rota: As the portfolio grows, each partner gets ownership of 1 property while the other two get the first charge. Would this work? Any alternatives? Thanks in advance Tom
  11. Hi Hubbers, Has anyone had any experience with joint Ltd Company BTL mortgages? The situation is that I want to do more renovations to rent, 50/50, with a colleague who also uses an SPV. We would be buying the properties cash and then financing them once value had been added. The aim would be to hold the properties 50/50 going forward. However, coming up against it with joint limited company BTL mortgages, has anyone got any experience with this? Many thanks, Jack
  12. Hi there, After lots of deliberation, I have decided that in order to get myself started on the property ladder and finally make my move into a career of property rentals, I am going to open up a Ltd Company. (To keep it short, my spouse owns a help to buy mortgage, meaning unless the equity loan is paid off for this home - which we cannot afford to do- , I am not allowed to apply for any other mortgage. The only way around this is to set up a Ltd company.) As someone who has not run a Ltd company before and does not know a great deal on this matter, I want to know if anyone has any recommendation of sites, books, courses etc. that are useful in starting up an Ltd company for property purposes? Has anyone been through this themselves? A lot of the literature available on limited companies and property are US based and so not relevant for the UK market. If anyone could recommend any literature or other educational tools, I would be most grateful. TIA.
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