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Hi sorry am newbie on here so please put this post where it needs to be if its in the wrong place thanks. OK, so I will just jump straight in, so the initial small start-up of our LTD company was done back in September 2017 as a JV between Father and 2 sons we will call this company "X", I am one of the sons that came up with the idea of creating a Property Co between us and sourced the first property and I have been doing all the work on the property myself since to begining. My father supply's the funding via a bussiness loan from his sole trader bussiness, my brother does the accounting and set up the company etc. My brother and I jointly loaned the company 65K (this money was borrowed so needs to be paid back to someone else intrest free) on start-up basically to buy the property and pay fees for purchase. The agreement is we take a equal shares 1/3 each of the final profit of the company. As well as I will draw a small wage weekly from the Co X's bussiness account, I am set up as a PAYE on the books (£185 a week after tax). We also have a written agreement that I will be paid an extra £215 a week (after tax) deferred until work is finished on the property this will be at the END of the project works as a cost/expence to Co X in the most tax efficient way. My fathers bussiness loan (interest free) will pay for running costs and materials of the project. Unfortunatly time has drag on, due to severe illness and Covid on my part the job is only nearing completion now. I have been working the whole time but at a serious reduced rate for the last 2 years. Finally 2 major operations later I am on the mend and back to my normal self and finishing the project quickly now. I have been paid £48100 in total via the £185 a week method so far and we have discussed and factored this illness into the project and came up with a fair payment for the work completed which is £38915 after tax either via PAYE or possibly another tax efficient method maybe discussed on here if you guys can help with that? Finaly we get to the profit part (refinancing part maybe not classified as profit yet for tax purposes). We have decided to refinance the property and rent it out. Let me give you some figures first before we get into were we go now. Joint Directors Loan in £65,000 in. Bussiness to bussiness loan from Fathers sole trade company £90,000 in. Total costs so far without my final payment of £38915 = £155,000 Re finance Value of property £320,000 at 25% LTV = £240,000 out After refinancing minus costs + my £38915 payment = £46,085 surplus for dividends or other. Monthly Rental Value £1100 after costs £900 to Co X as profits. The refinance has not taken place yet so Co X is still running at a loss right now. OK so this is what we want to do now. My father and brother wish to cash out their profit via dividends and keep the the house rented for as long as possible we can all draw down £300 a month dividends going forward as per shares allocated. They are no longer interested in property investment and have other business concerns going forward. I would like to start-up by myself a new group of companies though if possible/feasible. The idea is to start-up a new holding company "Co H" with 2 subsidiary Co's "Co 1 and Co 2" one for buying/renting properties and one for refurbing/building contract work. Main questions are: 1) If my holding Co "Co H" held/bought my 1/3 shares in Co X, would I be able to move my part of the refinance/dividend tax free into Co H? 2) If so, do I need to form Co H before we refinance the property in Co X to be more cost and tax efficient going forward for Co H? 3) If I formed a separated LTD company (SPV) whats the best way to move my funds from Co X into the SPV for future projects, I do not wish to take the Co X's money for my own use, I want to invest further whats the best way forward? 4) Can Co 2 (the building company set up in a group) or another new SPV invoice Co X for my final payment of £38915 as building labour (because thats what it is) and then invest that money into further projects in a more tax efficient way? You may have a completely different way of doing this, if so please share, as any help would be Golden! Please note I am not trying to avoid Tax but to be Tax efficient. If you think I am please point it out where as I do not want to fall into any problems in the future. Thanks for kindly reading this far if you managed it! Thanks in advance for any help or advice. Christopher

Hello, I'm about to choose an accountant for to set up my first SPV, which I will use for my next investment and any further to that. I have narrowed it down to two accountancy companies, both of which I quite like. A) The first is a company of about 15 employees, but the owner handles most of the client relationships and tax advice himself. He seems very switched on and gave me a lot of advice on the phone for free when I first spoke to him. They are not property specific, although say that property investors make up nearly half their business and they have their own property investments. Cost ~£1,300/yr. B ) The second option is a property specific accountancy that branched out of a larger firm a few years ago. They would assign me an accountant who would manage my business and I would get 4 half-hour consultations with a year for tax advice, plus unlimited more general advice and technical support. They also have their own software for recording and tracking property finance and operation, which sounds quite useful. Cost ~£1,000/yr. My feeling is that A) might be a slightly more personal experience and possibly spot more opportunities to optimise drawing income from the company, but B ) is more tailored to the property investor so might spot more opportunities to operate more efficiently, plus the software sounds useful. I don't consider the difference in price that significant and would rather choose the better service. I feel like one of these probably is a better choice but I'm finding it difficult to evaluate which it is. I would appreciate your thoughts and advice! Thank you.

Hi all, I’m curious to know if corporation tax is payable on funds released by mortgaging a property. For example, if my LTD company buys a house for £100k cash and then I mortgage it for £200k (example) at 75% LTV, that means that the company would receive £150k cash from the remortgage. Is this £150k essentially tax free or would corporation tax be payable? As a personal/individual landlord (not a LTD company) I know that CGT isn’t payable on equity release, but I’m not sure if this is the case for LTD companies. Any insights are greatly appreciated! Thanks!

I'm thinking that any future property I purchase should be in a Ltd company structure. The only thing I don't like is that anyone would be able to look my name up online and see that I own a property investment company and how much it is worth. I don't mind a lawyer being able to find what I own, I'm just not sure I'm comfortable with my friends and colleagues being able to look me up and say "ooh they're worth £X". Not least because they might not even understand what they're looking at, and possible think I'm far wealthier than I am 😆 Furthermore, there seems to be resentment towards landlords which other investors don't have to suffer. I don't suppose there is any practical way anyway around this..? Also, for the Ltd company's registered address, I was thinking of using a 'virtual trading address' such as those that UKpostbox offer, just so I don't have to give my home address to tenants. Is this something others are using? Thanks!

It's no secret that leveraged property investment has been very lucrative in recent decades, but people have been made bankrupt as well, especially in 2008. I'm trying to get to grips with how people with larger portfolios sleep at night with lots of mortgage debt to their name. Let's say I have one Buy-To-Let worth £200k with £150k debt against it and it's held in an SPV with a 20% personal guarantee (PG). The most I can lose personally is 20% of debt, so £30k. This isn't too scary, unless I've spent all my money it probably won't bankrupt me and it's not an insurmountable amount of money to rebuild. Anyone hoping to grow big though is going to one day end up with much more debt than this, perhaps they will end up with 20 of the same property, worth a total of £4M with £3M debt and the same 20% PG. Now they are personally liable for up to £600k! That's a much scarier amount. I can think of a few ways investors might justify these risks and I'd be interested to get your thoughts. A) prices will never fall more than 25% and so negative equity will never occur, and if the property needs remortaging at this price (which won't be possible without putting new money in because of the new value) then it can be easily sold to cover the debt. B ) before prices get anywhere near dropping by 25%, the government will step in to support the housing market C) The investor has sufficient other assets to cover any insolvency in their property portfolio I get the impression that a lot of people are either not thinking about this risk or thinking of A and B. In my eyes at the moment, only C is really that safe. If the properties are held personally or with a larger PG, then much more is at risk. As an investor grows their portfolio, they might be under the impression that they are unstoppable, but if they keep up a mortgage LTV of 75% across their portfolio, they are no more safe against bankruptcy than someone with a single property, and in fact have more to lose. Please let me know what you think, do you have a way to mitigate against these risks? Am I missing something? Thanks

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!

While it seems common place to refinance properties owned in an SPV and use the proceeds to fund the deposit on further properties, what options are there to access that equity if one doesn't want to grow there property portfolio any further..? Since equity released by refinancing is not a profit, I imagine it is therefore impossible to extract the equity through dividends - one would instead have to sell a property and record a profit?? This seems like a significant drawback to me compared to owning property in my own name, considering that I don't intend to just forever buy more and more property... (but might want to buy enough to otherwise make an SPV worthwhile..) Looking forward to hearing what people have to say on this. Thanks in advance!

Hi, I'm just in the process of re-mortgaging one property in my portfolio which has come to the end of its term. We're looking to borrow just under 70k which is 75%LTV. The bank are asking for the following information which I think is vastly over the top: Business plan Cashflow forecast Original source of wealth to buy properties Latest accounts (fair enough) Interested to hear others thoughts on this. I think if we were looking to borrow a million it might be justified but just under 70k? Seems extreme. Looking forward to any comments Jon

Hi all, I have an unecumbered property currently held in my LTD co in Scotland. Approx value of 100k. I am looking to release equity from this property in order to help me grow my portfolio, this is the first time i'll be mortgaging anything in my portfolio and as such was hoping to get some advice from a broker. Is there anyone on here that would like to have a chat? Thanks

Hi All First post so here goes! I'm considering building up a portfolio of BTL properties over the next few years in the UK. I'm an Irish passport holder who is currently working in Saudi, so I'm a non-UK resident investor. I worked in the UK years ago. I am currently looking at 2 options - setup my own SVP LTD company and / or a JV with a UK business partner . If financially feasible, I will likely use both strategies. As I am a foreign investor and my potential partner is a UK resident I'm unsure if it would adversely affect the business profitability and create issues when deciding to extract profits / sell properties from the portfolio. I currently pay no tax in the UK and my potential business partner would be in the 40% band - again unsure how this would impact on any potential partnership. I'm a bit unsure of the best approach for company structuring, so thought I would seek feedback from the forum. I will of course get professional advice but I'm trying to expand my general knowledge first. Overview of my options and general queries I have: Option 1: Only Myself (SVP LTD Company) Target market Northern Ireland. I may also look at Scotland if property supply / obtaining finance becomes an issue. Which country is the best UK country to establish the company in? BTL properties in range of 50-90k purchase price, with 5-10k light refurb works to add value / increase rent chargeable where required - separate company for renovations beneficial? Initial investment via director loan to company = GBP 60k. I may also initially need to purchase 1 or 2 cheap properties with cash to demonstrate previous BTL experience to get financing. Plan to purchase 2 - 3 BTL's a year for the first 5 years. I will review after 2- 3 years and adjust my strategy if required. Exit strategy - retirement pot, so I plan keep / reinvest all profits in the company. Hold onto properties longer term, potentially sell one every few years if needed or market price is good. Option 2: SVP Business Partner - LTD or LLP Company Structure? UK passport holder/resident and myself. My business partner may also go to work in Saudi in the future, possibly in 1-2 years. Company structure - SVP for BLT mortgages- unsure if Ltd. company or LLP be best route? Target market Scotland - is Scotland the best UK country to establish the company in? BTL properties in range of 40- 80k purchase price, with 5-10k light refurb works to add value / increase rent chargeable where required - separate company for renovations beneficial? Initial investment via director loan to company from both parties= GBP 30k each, so GBP 60,000 in total. Plan to purchase 3-6 a year over 5 years. Re-assess strategy year 3. Exit strategy: UK business partner wishes to let money sit & reinvest into the company for 2-3 years, draw director salary, get his initial director loan out of the company and potentially sell off the odd property if decent returns achievable from year 3 onwards. Exit strategy: I'm unsure about which approach I will pursue, need advice as I'm unfamiliar with UK tax system and if our circumstances will impact profits / returns. Hopefully the above makes sense. All feedback welcome, thanks in advance!

Hello! That’s my first post and I’m looking for strategy advice. Here’s a little background to my story. Together with my wife we are planning to buy our first investment property by the end of this year. We live in Bristol and plan to buy in Liverpool a 3 bedroom house and renting rooms ideally around £400 each. We have £10k savings and we can have another 10k by November. In August we are going to remortgage our residential property releasing potentially up to £20k. Our main plan is to become financially independent as soon as possible. I earn 35k and my wife 13k with little prospect for any of us for promotion and pushing us into a higher tax band My first question is: would it be wise to invest most of our savings and convert our loft into a 3rd bedroom hoping to increase value of our residential by 30-40k property and releasing more equity in August? My second question is should we buy the house for ourselves or as ltd keeping in mind that gradually as our portfolio builds up we’d like to slow down with investing and live off the money from rent. Many thanks for all your answers!

Hi everyone, Hoping we can get some advice from experienced property investors.... Background: My wife and I own 3 investment properties, which we bought 5 years ago - owning them personally. We are looking to add to our portfolio, but with the changes to Finance Cost relief (both higher rate tax payers), we are really starting to feel the pinch of the restrictions. Dilemma: Whether to buy our next investment personally or via a limited company. From what we can tell, the key differences are Tax rates & Mortgage rates. I'm clear on the tax rate difference (Personal = 40% on profit before Financing, + 20% relief on Finance costs). What is less clear to me is the difference in interest rates typically for BTL held personally vs LTD company Questions: Can anyone advise on what difference to generally expect in mortgage rates? (i've heard 0.5% all the way up to 2% - and the implications are pretty large on a typical 70%LTV Any other advice from others in a similar position would be greatly appreciated! Many thanks, Mike

Hello, New to this site and new to buy to let investing! Considering setting up a SPV Limited Company to purchase my first BTL investment property in Scotland. Looking for advice/recommendations for a mortgage broker who can help and advice on which lenders to go for/avoid. And anything else that might be relevant! Thanks in advance.

Hi, I'm Charlie from Bury in North Manchester. I'm a complete novice in the property game. Working very busily through life and realise pensions just won't cover my retirement plans. Have been talking about going into property for several years particularly following a redundancy back in 2015 however I found myself back in a full time demanding role. Looking to initially flip to raise some capital and also build a rental portfolio for the longer term. Areas of interest are local - so North Manchester towns including Bury, Ramsbottom, Tottington, Heywood, Norden, Bamford, Rawtenstall. Plans are to get stuck in and get my hands dirty - I have a good supporting family who are also willing to help out. My biggest fear - I'm very risk averse and constantly hold back where money is involved - what if I lose my savings! Would love to hear from others who are holding down a full time job and family and managing to fulfil their property goals too. Any advice welcome.

Hi, Has anyone had any experience or recommendations for a bank that will allow a new company account, which is owned by two companies. It is for a JV, we have set up a new Limited company for the project which is owned by two separate companies but struggling to find a bank account to support this structure. Any recommendations or advice would be greatly appreciated. Many thanks, Kate

Hi, My mother has a mortgage free rental property worth 200k, that she would like to gift to me. I have a rental property worth 250k. My wife has a rental property worth 350k. Our income combined with the income from these properties fall within the basic tax rate. I plan to buy further investment properties in the future, therefore created a Ltd company seems the best way forward. (If only I’d started listening to The Property Podcast when we first started investing). Is it possible for my mother to gift this property to my Ltd company? Or sell it to the company for £1 for example? Any suggestions would be much appreciated please!

Hello , first post! Firstly just like to say what an amazing resource this is for newbies like myself! Although I do have a question that I just can’t seem to get my head around, with regards to going either LTD or sole trader, and I hope someone maybe able to explain. Could anyone explain the differences in tax’s, albeit roughly, assuming average for rates etc on the following for ltd and sole trader: Income: £30kpa BTL propertys x 2 bringing in pre tax: £12kpa Difference would be on future property’s obviously. TIA

Hi all! I am currently purchasing two flats, both freehold (one ground floor and one first floor flat). This purchase will mean I will own the whole building (there are only two flats in this house that has been converted around 10/15 years ago). I've been going through the dilemma of purchasing through an LTD or not and finally concluded that LTD was the way to go; however because I am a first time landlord and the two flats are freehold I (my broker) has struggled to find competitive interest only mortgages and consequently wipe out the benefits entirely (and some) of going the LTD route. So now am purchasing the flats in my own name. Can I own the freehold of the land that the two flats are situated on in my own name (self-assessment) and issue two leaseholds (one for each flat) and have these in my LTD? How do you issue a leasehold when you are freeholder? Many thanks in advance!

Hello everyone, I’m new to property investing and wanted to get your thoughts and advice on whether what I am thinking of doing in the future is feasible. Current Situation: I bought a flat worth £340k two years ago to live in as a first-time buyer. I incurred ~£10k of SDLT and legal expenses that I deemed capitalised hence a total cost of £350k. The initial two year fixed repayment mortgage of 1.8% is about to lapse and I am currently looking into remortgaging on a two year tracker with no early repayment charge to give me more flexibility The mortgage amount left is ~£200k (LTV<60%) and 28 years I estimate that the property is worth £320k and can achieve a rental value of £1350 (zoopla estimation is lower though) Net rental income is £870 after service charge & ground rent of £130 and £330 of interest expense (based on 2% interest) Aim: I want to let out the property I currently own and buy a second property worth £500k to live in I am planning to finance the purchase by: borrowing £300k on a joint mortgage application with my partner (or perhaps solo) release equity from my existing home fund the remaining balance from own funds Proposed strategy: I understand that with the current regulation any second property purchase is going to incur a 3% SDLT surcharge. Therefore, if I keep my current property I will have to pay £30k rather than £15k in SDLT. To avoid the SDLT surcharge, the solution I came up with is to transfer my current property into a company SPV which would mean that I will not own any property at the time of the second property purchase. I understand that the company will have to pay SDLT of £6k (assuming a £320k valuation) as part of this transfer. I understand that I will need to arrange bridging finance and I will also need to personally guarantee the loan as a director. Questions: Is the transaction that I have outlined above feasible or have I missed any key issues? Any other logistics I need to be aware of? Would the personal director guarantee limit my ability to get a joint mortgage or the extent of borrowing? How much equity would I be able to release from my current property? Any other alternative strategy I can follow to achieve the same result? In addition to saving on SDLT of the second purchase, I understand that I will have further tax benefits such as netting of interest cost against income and getting taxed on corporation tax rate rather than personal income tax rates (higher rate). If I decide to sell my the property, I can sell the SPV rather than the actual property which would mean that the buyer would not have to pay SDLT hence making it a more attractive sale. Is this last point accurate and would it translate to an increased valuation? Thanks for your time and I appreciate any thoughts or advice you may have.

Dear all I'm new on this so I will try to explain my query as clear as possible. I would like to buy and renovate properties, maybe starting with small spaces as a studio or similar, and then to sell them again for profits. I'm thinking to do it trough my Ltd so I can invest the money directly from my ltd account (I'm the director - no employees) I got some basics questions on the above.: A- is to buy and sell properties trough my ltd legal? Even if my ltd has been settled as a consultants company. I'm a project manager working on constructions B- are the money used to buy and renovate the properties considered as expenses so they could be deducted from the turnover. C- as above, the money that the ltd will get from selling will be considered as a normal money earned by my Ltd D- Do you think would be better set up a new ltd dedicated for the activity of buy to let/sell properties? E - Any particular suggestion? I'm good to find the properties I know how to work on that and the potencial they might could have...what I missing is all the legal process, taxes etc etc Many thanks to all will spend a bit of time to answer Ciao Simone

I have a Ltd property company for simple BTLs. I am looking at investing some surplus cash into peer to peer property funds. It would be preferable (from a tax perspective) to lend from my company and the company earns the interest. My accountant has indicated that this is fine. I wonder whether there may be adverse consequences from mortgage lenders if the Ltd company is engaged in this activity? Do any hubbers have experience of this?

Evening all, I have set up a LTD co with myself as only director and shareholder at the moment as it was easy to do by myself and should satisfy everything from a Lenders perspective looking at my earnings etc. I have no properties purchased through this SPV yet but want to crack on soon. I have a wife and 2 infant children. I would like to eventually pass on on the wealth created to my children when I pass away so my questions are?: whats the best way to do this? can I set them up as shareholders at this early age or wait until they're older? Would it be a massive issue to change the structure once properties have been purchased? If anyone could give me any recommendations or point me in the direction of someone who can that would be greatly appreciated Many thanks

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

Hi Hubers, In the latest "TPP 324: Is buy-to-let dead?" Rob mentioned this in regards to tax changes: I would like to build my portfolio for the next 15 years from now and I would like to start tomorrow . Does it mean I should set up an LTD Company and keep buying properties via the company? If yes, then what is going to happen with all that income from these properties? Keep it on saving's account for the next 15 years ? I was thinking maybe I could employ my partner in the LTD company and she would take that income instead of me . What do you think? What are your ideas about it?

Hi Hubbers, I am looking for a buy to let mortgage as an expat buying through a limited company and do not currently have any other properties to my name. I've checked out some other threads on this forum and extracted some brokers to contact including: AS Financial, Liquid Financial Services; Charcol.co.uk; Vida homeloans. I would really appreciate any tips / advice if anyone has any recommendations from their own experience in a similar position (as an expat buying through limited company). I have spoken with Liquid expat who have come up with an option at 4.3% fixed but would ideally like to get a few more options on the table for comparison before moving forward. Few extra details about me: I am an expat in Qatar looking to buy in the Liverpool / Manchester areas. Hope to hear from you.