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New start up, advice needed!


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Good evening,

I apologise for how long winded I feel this may be. I feel like I am all over the spot and would appreciate the type of professionals that I could use to achieve my goals (accountant with experience in property investing, tax adviser etc) and even better specific companies who would be recommended.

Ok, so I am currently a director of a ltd company which includes me and my senior director based in the North West. 

We have had a good few years business and have managed to survive lockdown with a reasonable pot of money in the business account. We have decided to take a proportion of the profits which I would like to use to start building a property portfolio. 

I continue to hover around the upper tax threshold and I am reluctant to take this as a dividend payment where it can be avoided. As I need cash, my thoughts are I could take the money as a directors loan and pay it back to the company until such a time I could stagger smaller dividend payments over the following years to manage tax efficiency? Or set up the SPV Ltd company now, loan the money from my current business to the new one and let the money sit there for 3 months at which time go for a mortgage? 

Am I right in assuming that regardless of the options above the mortgage lenders will see the money as a loan if they identify its source? 

My current accountant is reactive instead of proactive and I am reluctant to involve them in my new business. This has proven costly for me the last financial year in respect of a business car lease which resulted in a benefit on my tax return which put me significantly over the upper tax limit (without sounding like I am moaning, if I was advised on this I would have certainly taken the personal lease option). 

My plan is to set up a separate SPV Ltd company with my wife (lower rate tax payer) with an aim to acquire properties on a buy to let/buy to holiday let strategy (with a possible benefit of acquiring them on the way down in the potential coming recession). Over the next 5 years the minimum I wish to acquire is a tenanted BTL (where I remove as much of my additional investment out) then purchase and a BTL holiday let which my partner would manage as a holiday or corporate let (so that she can stop working/work only part time). I wish to obtain the Vanilla BTL first of all to act as an additional buffer for void periods with the holiday let. A golden egg would be to acquire a HMO as I regularly work with landlords to ensure fire safety standards are met within their premises and seeing the state of some of them I feel I could provide higher quality accommodation to meet the demand in my area.

Ultimately, I wish to seek sound advice and put the right strategy in place to achieve my goal whilst being compliant and not doing anything illegal.

Hopefully, this post hasn't resulted in you deciding to have an early night and I thank you in advance for any response.

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There should be a few ways to address this, either by getting the right brokers who can source finance where you have intercompany loans or look at your options for establishing a group company structure. A holiday let strategy can be better structured held in individual ownership. There's so many "what ifs?" that its probably worth talking through options on the phone.

Jerome

Jerome@TaxAntics.co.uk

www.TaxAntics.co.uk
 

 

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38 minutes ago, TaxAntics said:

There should be a few ways to address this, either by getting the right brokers who can source finance where you have intercompany loans or look at your options for establishing a group company structure. A holiday let strategy can be better structured held in individual ownership. There's so many "what ifs?" that its probably worth talking through options on the phone.

Hi TaxAntics,

Thank you for your reply I will look into group company structure. Do you recommend anyone that I can speak to?

I think the main thing would be how best to get the funds available to be used as a deposit. My current Mortgage Broker advised me that no lender would touch me if I had used money from a loan to get a mortgage?!?!

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I can help if you want to discuss sometime. I have plenty of clients who have leant money into companies to facilitate investments so that’s a little strange to hear! Maybe he’s not used to commercial lending.... Have a good weekend, Jerome

Jerome

Jerome@TaxAntics.co.uk

www.TaxAntics.co.uk
 

 

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