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Change my Ltd Contracting PSC into Property Co?

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Hi All,


Firstly, I absolutely love the podcasts, the forum and the meet ups - you're all keeping me motivated to continue investing - so thanks very much!


I've been contracting via my own personal services limited company for the last 14 years but have just taken a permanent job.  I've got some cash in my company and am not sure what to do with the company now.  I am pondering whether I should close it and take the cash out or change the type of business into a property investment company, de-resgister for vat and use the cash to buy rental property? My permanent salary means I'm a higher rate tax payer now and Im not really planning to go back to contracting..


I have a few questions about this:

1. is it ok to change the business activties of the company? is this a normal thing to do?

2. has anone else been in this position, if so what did you do?

3. it seems to me that it would be most tax advantageous to change it to a different company, has anyone got any thoughts on that?

4. What SIC code do I change the company to?


Thanks everyone for your help.




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  • 1 year later...

No, I closed the co.  But I had decided before that I didn’t want to invest via a ltd co because I don’t want loads of properties (I was told by an accountant it wasn’t worth using ltd unless I was planning on having at least 6 properties - other people May have a different view). There are various ways to get your money out inc. paying up to 10k p.a. into a pension fund, gifting shares to your souse who May be a lower rate tax payer.   I don’t think it would have been a problem to switch the company over though either.  Best thing is to talk to an accountant. 

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I will have to stop contracting next year and will be in the same position as you.

I've spoke to a few accountants, who I met on this forum actually, and have decided to invest my retained earnings into building a property portfolio.

They suggested opening up another company (for prop investments) and making an intercompany loan (my retained earnings) from my PSC Ltd company. That way money stays within a company structure and attracts less tax I think. 

I guess it all depends on what your long term goals are.


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I've gone through the same thing where I had a limited co.  when I was contracting but as at early this year had to go under an umbrella scheme and back to PAYE. Now, I'm in the process of winding down the limited co. I had previously set up another SPV for property investing whilst contracting and as gd mentioned, provided an intercompany loan between the two entities to fund the property.

From my understanding, it's better to create a new, separate SPV for the property investments rather than changing your existing ltd. co. to a different SIC code, especially if you're looking to fund the investments with borrowings from a lender. Mainly in case you receive a claim against it from a previous employer/client, or an adverse audit/tax expense, the lender won't want that held over the existing company.

Your accountant should be able to review your situation and needs, and plan your tax position as effective as possible when you need to wind down the limited co. 

I'm not an accountant, just speaking from personal experience, so please consult your tax advisor and mortgage broker, as everyone's situation is different.

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