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Interest Only vs Repayment Mortgage - Limited Company


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Hi I have set up a company/svp in order to start to build up a property portfolio. I was looking to do interest only (as landlords with a company will be able to continue to declare rental income after deducting the mortgage interest only payments) and make over-payments annually upto 10% so that i can pay the properties off. If i do the overpayments will that have any impact on the tax deductable nature of the calculation please ? or will these count like repayment mortgages and not be tax deductible. Any information here would be very useful. Thanks
 

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First thing is that you need to talk to an accountant if going down the LTD route.

Having said that, tax in a ltd is simply based on total rental income minus total allowable expenses. Overpayments etc are not allowable expenses but interest/management-fees/repairs/salary etc are. Once you have declared your profit and paid tax on it then the net profit is for the ltd top do waht it likes eg pay a dividend, buy anopther property, make a lump sum mortgage payment etc.

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