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Found 31 results

  1. Hi, looking for some advice as i cant quite seem to get my head round the best thing to do, so here is my quandary:- I own 6 x BTL property, all with personal BTL mortgages on, all in mine and my brothers name. My accountant is telling me that i should start to move these properties across to a Ltd company. At a high level this makes perfect sense as we limit our tax liability as we are both higher rate tax payers, but here is my scenario and to use one of the 6 properties as an example:- NB: all figures have been rounded for ease. Current property value is c. £160K, mortgage balance is £77K, current interest only mortgage payments are £149 pcm, service charge is £75 pcm, incoming rent is £795 - profit is £6.8K per annum Assuming no other expense/income, me and my brother will pay c.40% tax on the full £6.8K next year = £2.7K, so we retain £4.1K as cash in the bank If i sell/transfer to the Ltd company at £160K (to release the equity) at 75% LTV this would release c £44K for me to reinvest which is great, but..... I would then be hit with a £8K SDLT, so my £44K becomes £36K, my mortgage payment would go up to c £325 pcm (working on 3.19% interest only Ltd company BTL) - this would increase my outgoings on the property by £2,112 per annum, so my annual profits decrease from £6.8K to £4,688 per annum. I then pay 20% corporation tax on the £4.68K, leaves me with £3.7K. So, in my head, by moving to a ltd company, i will be c. £400 worse off (the difference between £4.1K and £3.7K above) every year and would have had to pay £8K SDLT, plus conveyancing, solicitors and mortgage brokers etc - this doesn't make good financial sense does it? Although, i also accept i would have £36K to reinvest..... but all that being said, why would i not remortgage in our personal names again at £160K, release the £44K, increase my mortgage from £77K to £120K, but with the mortgage rates on offer right now, actually not increase my current monthly mortgage payment. Surely this is the way to go....? What am i missing....? Would really appreciate some thoughts, friendly advice from the guys on the forum. Many Thanks MB
  2. Hi Everyone, This is my first post after listening to the podcast for a few years, and unsurprisingly it relates to SDLT. Myself and my wife use to own a London flat (main residence) before we were married, which we sold back in 2016. Since then we've been in rented accommodation. We're now looking into starting our property adventure but would like some advice on the following. Given we sold a primary residence and have not completed the purchase of a replacement main residence before the 26th November 2018, it looks to us we will need to pay the additional 3% SDLT if we buy any property in our names. To us the most tax efficient way forward looks to be to start buying BTL properties into our LTD company, paying the 3% surcharge each time. However when it then comes to buying a main residence in London, which will create a much high SDLT payment, we transfer one of those BTL properties into our individual names, pay the 3% surcharge again and designate it as our primary residence and then sell it back to the company when we purchase our main residence, avoiding the additional 3% surcharge on the new main residence. There should be a break-even point where the additional 3% surcharges incurred moving the BTL property out of and then back into the LTD company are greater than the 3% surcharge on the new main residence. For example on an £800k London flat the 3% surcharge equates to an additional £24k SDLT, so as long as the cost of moving the BTL property around is less than that then it should still be the right economic decision. This would put the break-even value of the BTL flat at £275k, as it incurs £12k SDLT moving the property out of the company and another £12k moving it back in. Any thoughts on whether this is possible, pragmatic and the most tax efficient way of ending up with a new main residence in London and a BTL portfolio in a LTD company would be greatly appreciated. I've also ignored the impact of any CGT tax liability generated in the above scenario and any thoughts on this would be helpful. Sorry for the long post, but wanted to come up with a suggestion to be critiqued rather than just a request for information. Thanks, James
  3. Hi hubbers, I was hoping for a little bit of advice. My wife and I are currently looking to buy our 2nd BTL and we are not sure whether to buy in a Ltd company or not. We are both basic rate tax payers and can afford to buy in our personal names and not be pushed into the higher tax bracket providing we equalise our salaries (although we will be close to the 40 percent tax bracket). We are both 27 and I would like to think that in the next 3-5 years we would have had pay rises making us higher rate tax payers (myself more so as my wife is now working part-time). So my question is; Do we bite the bullet and invest through a Ltd Company even though the interest rates and costs are higher or do we invest in our personal names and buy all subsequent properties through a company? on a side note, our current strategy is to invest in areas that are likely to see high capital growth and then recycle that deposit when we remortgage. Is this a flawed strategy when buying in our personal names? My reasoning is that with the lending criteria stress test at 5.5% interest rate x 145% rental income - it now seems that lenders are more interested in achieving rents than the LTV? Because of this, would we need to buy in a LTD company (where the stress tests are more leniant) for our strategy to work? A very long winded question! If any of you can give any advice it would be very much appreciated! Thanks all! Adam
  4. Hi, I'm looking for advice going forward with regards to living off my rental income and future remortgages. I'm thinking forward and looking at the possibility of living off my rental income in the near future. I'm looking to save up a lump sum to live off initially and would like advice from full-time property investors. 1st question is, once living solely on rental income, how easy is it to remortgage your BTL's and home mortgage? Have you done this? which lenders do it and what criteria are they looking for the least? and what's a typical rate of the mortgage? Most of my BTL's are on a 5 year fixed, 70% LTV and home mortgage is remortgagable in August 2018, 50% LTV. 2nd question is, Again living solely on your rental income, how many BTL's or cash flow would you have in your personal name before using a LTD company for other purchases? Would you buy in your personal name until your near the 40% tax rate? Thank you so much for your advice. Have a great day Paul
  5. Hi All, Been following The Property hub for a long time and an opportunity to purchase a property has come up that I would like some advice on, in short: A 3 bed mid terrace property is to be auctioned in a couple of weeks with the starting price around 100k BMV for area, I'm well aware this is likely to go higher. The property has been repossessed, has internal water damage and needs a complete refurb. The numbers seem to stack up from my calculations. I will be viewing it to have a proper inspection this week to get more of an idea on the work. My intention is to refurb pull money out and convert into 4 bed HMO as its outside article 4 and in a good area. My questions: I had always intended to start a ltd company to buy properties in as I intend to be in it for the long term and I could save the 1st time buyers stamp duty relief for a bigger purchase but after reading different threads on here and considering the time constraints I am questioning if this is a good idea/possible? I will be speaking to mortgage broker early next week, but would I need bridging finance for the refurb or could I buy on a residential, live there during refurb and then convert to HMO BTL once complete? (taking into consideration early redemption fees).Finally does anyone have any experience with water damage properties, what specifically I should look for when viewing the property specifically for water damage and HMO compliance other than room size? For context I am a 1st time buyer living with my parents. I work as a civil engineer earning 27-28k so have saved up enough for 20ish% deposit on this house. I am aware it is a big job and hoping this will put most people off. My parents have two BTL properties which have given them good returns and I've lived in properties being renovated for as long as I can remember where my dad has carried out most of the work himself and I have helped. Assuming I could get this property for the price I anticipate, there is nothing on the market even close in terms of value. As I mentioned before I always intended to be in this in the long term, and while my ambitions have been tempered by some threads on here, I still intend to build a portfolio income that I could not achieve by career progression alone. Any advice would be greatly appreciated, Many thanks Jordan
  6. Hi, My name is Dan. I have recently started a ltd company and am looking for recommendations for sourcing companies, investors and bridging finance companies. For the experienced investors... - what would you do differently knowing what you know now? And That you wish you was aware of when you started your journey? Thanks in advance Dan
  7. Hullo! I think I know the answer to this but just wanted to double check as I can't find this specific example in the HMRC guide to stamp duty surcharge (although admittedly I may have missed it as I became glassy eyed half way through!). So I am planning to set up a SPV Ltd Company for my BTL portfolio. I currently don't have any BTL but I do jointly own a house, which is my main residence. My question is will my 1st BTL, purchased through a LTD Company be considered my 1st or 2nd home.. or in financial terms... will I have to pay 3% SDLT or 0% (assuming it falls under 125k)? I'm at the number crunching stage so want to ensure I have my facts and figures correct! Until now I have been using the Which BTL Stamp Duty calculator with some confusing results.... Thank you in advance Thandi
  8. Hi all,I am currently planning to go into business with my step-brother, building a buy to let portfolio. We are trying to work the best way to set ourselves up. (Buying properties as individuals, jointly or in a Ltd company. )He is employed with an income above £25,000, as am I currently. However, I will soon be leaving my current job to set up as self employed. I know that directors’ incomes are assessed when a Ltd company applies for a mortgage so does the fact that one director may have insufficient income make getting mortgages impossible?We want to make sure we start in the correct way. Any advice would be much appreciated. Alex.
  9. I currently own 6 buy to Let properties; 3 in Birmingham; one in Liverpool, one in Buckinghamshire Nd one in Croydon. The properties are a mix of 3 1-2 bed flats, one HMO and 2 2-3 bed houses. given the tax regulations changes I am looking to put these into a ltd company, I currently have the company registered since September 2016 and the company bank account set up. However I have no money going in or out of the property account yet as I need clarity on the best way to move the properties over from personal ownership to company ownership without losing money on selling them from my person to my company my investment strategy is based on long term capital growth .Any advise will be much appreciated.
  10. Hi all, I did try to search for an answer to this but could not find anything so sorry if i've missed it. Myself and my business partner (both 20% rate tax payers) are looking to buy our first BTL property soon. Our goals are to recycle our deposit as best as we can and continue purchasing property. The properties will hopefully be used as a pension, and eventually passed on to both sets of family members. We will not need to use the monthly cash flow initially (other than to reinvest), but in 5 years hope to start using some of it to allow us to drop down a day in our jobs. What i would like to know is what is the best, most tax efficient way to set up? Partnership or LTD Company? And is there anything we can do now that will make passing on the properties to both our separate families easier in the future? Thank you in advance for any help you can give me. Bob
  11. Hello people, I'm looking for advice on whether I should open up a ltdc ompany. I have just had an offer accepted on a property which is why I am planning to open the Ltd company now so that I can purchase the property straight in to the company and avoid a double stamp duty by buying it in my own name, then selling it to the company once formed, which I believe the sale price must be at market value? My future plans are to expand my rental portfolio as much as possible aswell as possibly doing some flips. I also have one more property in my own name which I would like to put in the company what would be the most financially beneficial way to do this? Any advice will be much appreciated. Thank You
  12. Hi Hubsters, Recently stumbled upon Rob & Robs pod cast as I am keen to make my way in the world of property investment. I don't think I have an issue financing the odd buy to let or flip project but I am in need of sound, genuine advice as to where to start and what my first moves should be. Lets say, I have the funds in place to buy at my disposal... I want to find a property 20-30% under market value, so I look at auction sites /repossessions etc... what happens next? I see one in an area with all the right fundamentals. Do I pay for the property to be surveyed? get builders in to look and price all the work up and then go along to the auction with a maximum bid in mind to try and buy that property? What fees surround these transactions? Apologies if this sounds so so basic and uninteresting but I am struggling to get my head around the order in which these steps take place. I am aware it's always going to be a risk but want to ensure I do my due diligence to limit the number of risks I take. Also, As I am looking to venture into the world of flipping properties and buy to lets, does any one have an opinion as to how Brexit will affect house prices/market and if so, when? From a common sense viewpoint, S24 aside, B2L seems less risky as the renting market will never really drop and if you own the property you will keep it through the housing price drop? Where as if you purchase a house with the idea of flipping it in mind, and all of a sudden the market drops. which with Brexit round the corner is surly a possibility? Any feedback or conversation to issue some sound advice would be muchos appreciated, also if you guys know which number podcast any of my points may be relevant to, please let me know. Jon.
  13. Hi Hubbers I’m after some advice for setting up my first company for the purpose of - purchasing and letting my own property managing the letting of another property owned by a different company I am planning to use the following SIC codes: 68100: Buying & selling of own real estate; 6820: Other letting and operating of own or leased real estate Are there any disadvantages of having more than 1 SIC code? Thanks in advance for your help Joe
  14. Hello all, I'm after advice from experienced investors out there. My partner and I are intending to purchase our first BTL on a 75% LTV mortgage soon but are still unsure as to do it in our names or as a company. I am in full employment earning 50k. She is self-employed and in the last tax year earned around 45k. We plan to start growing a portfolio over the next few years, hopefully with 3 or 4 before the inevitable crash in the market. We would probably reinvest the majority of the income but draw on it occasionally, when for example my partner is between jobs or we have kids in a few years. Overall our strategy is to buy and hold to supplement our pension in the future. Any advice would be greatly appreciated. Also any details of tax advisors that wouldn't rip us off for a consultation would be welcome also. James.
  15. Hi guys I'm a contractor and receive my salary through my Personal Ltd Company. I'm looking to purchase a buy to let via a separate Property Ltd Company/SPV. I'm looking for advice on the most tax efficient (i.e. minimising dividend tax) way to transfer funds for the deposit from my Personal Ltd Company to the Property Ltd Company/SPV? I'm going to discuss with accountant but would appreciate some background knowledge beforehand. I've seen various suggestions centering around making a loan between the two companies...
  16. Hi, Please does anyone have any advice or know anyone that does, regarding setting up and structuring a JV Ltd company, with a view on minimising inheritance/tax liabilities when extracting or transferring any assets after a 15 year period. It will have 2 controlling directors (Myself and JV partner) and 2 non-controlling shareholders (Spouse's), with a view to buy, hold and re-invest in multiple BTL properties over a 12 – 15 year timespan. At the end of which we would either: 1/ Sell everything and extract any profit in the most tax efficient way. Or 2/ Split existing properties and cash in half, and then move into two separate Ltd company in each individuals names. Many thanks, Barry.
  17. Hello, I am buying a BTL property through a Ltd company. I have the mortgage offer accepted. The lender wants a fixed & floating charge on the company and any future properties bought by the company. Will this be a problem when I want to buy a second property through the Ltd company. The solicitor said this is a standard procedure, but also said there may be a problem when I want to buy a second property. If anybody has any thoughts on this please could you share it. I want to understand what I am getting into. Regards Suhu
  18. Hello, I am an expat with 2 properties in the UK, I plan on moving back to the UK at some point maybe in the next 5 years. I'm thinking of setting up a limited company to buy future properties through and also move my existing properties over. By moving my existing properties over to a limited company would I have to pay any tax? Both properties are valued less then 100K.
  19. Hello everyone, I'm looking for some advice in what I hope is not too much of a niche arrangement. A group of around 10 friends and I want to invest in property together and are unsure on what options we have for going about it. I believe the principle is pretty straight forward, each person would pay a defined amount (say £200 per month) into a central account and when we accumulated enough capital we would invest in a property. The rules and processes for: paying in, decision-making and getting money out would be pre-agreed from the outset. There would be periodic meetings to review our strategy (assumed at the moment to be buy-and-hold) in light of government or legislative change, review the portfolio and discuss new purchases or refinancing options. Each member of the group would be given a vote (if they so wished), but I think that we're all pretty well aligned in terms of thinking. Amongst the group I believe we have the skills (or at least the enthusiasm) to eventually be able to source, procure, refurbish and let the properties ourselves; but we would acquire professional help as and when necessary. I guess the difficulty in all this is selecting the right vehicle for investing and I would appreciate any support on the points below: Is a limited company likely to be the best option and if so, does it need to be a Special Purpose Vehicle (SPV)? If we were to choose an SPV, how would the company be vetted for a mortgage? Would all shareholders be credit checked, or would it just be the directors? What is likely to be the best accounting treatment for the monthly contributions? Would each group member be a director and their contributions be treated as directors' loans? Is there an alternative to the above? Any advice on the above or any other issues you can think of would be greatly appreciated. Thank you, Chris
  20. Split residential/commercial property under LTD Company and living in premises This is a tricky one. My partner and I are looking at buying a three storey house in which the bottom floor is a commercial shop. Both need renovation and we would like to live there and possibly run a business, or rent out the commercial segment and live in the residential part. We know we need a commercial mortgage. My partner is in the higher tax bracket and would continue to work while I would complete renovations. My question's are if we buy under under a LTD company can we live in the property? Would we need to pay rent to the company for living there? And if so could that money be paid to the mortgage lender to offset the company's income earnings and therefore no tax needs to be deducted? Are we better to put it in our own names instead of company. Thanks in advance for any help. Jeremy
  21. Hi Hubbers, I'm about to embark on my first BTL investment through an SPV/Limited company and had a question in relation to landlord insurance. Would I need to take out commercial Landlord Insurance (given that the mortgage and asset is owned by the company)? Or will standard personal Insurance suffice? Thanks, Anthony
  22. Hi folks, hope you've had a happy Christmas and are all set for 2017! Does anybody know of any good mortgage brokers that specialise in, or have good experience in finding, BTL mortgages for Limited Companies? I have a couple of properties that I'm interested in and need to get myself financing arranged so that I can begin making offers. I'll be purchasing through a limited company so figuring your highstreet brokers may be less suitable. I'm in the Manchester area so any local to here would be ideal, although I appreciate location isn't critical. cheers Tom
  23. Hi all, I am a newbie to the forum, so please forgive me if I am covering old ground I am at the beginning of my journey and, like most, have sent countless hours reading up on the BTL subject Two things that are standing out for me currently are- - Ltd Companies- It does appear, from what I have read, so if I am incorrect please again forgive me, is that the vast majority of BTL Landlords are operating through a Ltd Company. Even more so since Mr Osborne's tax changes. Can I ask, is this in most people's experience the preferable way forward? And if so can I ask why? - Accountant- I am not too bad with number, tax rules however I would not say the same about. My question is, can anyone recommend an accountant that they have worked with and is knowledgeable about BTL? I am in the Medway area of Kent, so Kent/London would be ideal thanks all in advance k
  24. Hi all, Love the podcast and content on this site! Here's what I'm doing/planning: I'll be buying my first property in the coming weeks/months. Looks like it'll be a straight forward BTL. I'm also entertaining the idea of property flipping either in UK, Spain or Portugal as I live and work between these countries. I'm employed (remotely) and will go part-time once I have the first purchase after my belt. For future UK purchases I'm considering starting a LTD company - this could also help by paying me a small salary and making sure I keep up NI contributions so that I won't be dependent on my employer (I'll need some advice/confirmation on this one) Any advice/comments are welcome! Cheers
  25. Hi Hubbers, This is probably an obvious question, but I'm going to go ahead and ask anyway... I plan on purchasing a BTL property via a Limited Company early next year. I'm just wondering when it comes to signing agreements/contracts with third parties (e.g. tenancy agreements, insurance agreements, letting agency agreements etc)- would it be myself or the limited company that is named on the paperwork? Really appreciate your help! Thanks, Anthony
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