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My house and limited company


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Hi, wondering if anyone here can help me as I know there are lots of experience property people here! Bit of a long one but here goes.......

I’m selling my large flat to buy a house. I have a plan in mind which is:

  • to sell the flat to a property company that I own
  • the company will need a mortgage to buy the flat
  • the property company will then let out the flat 
  • at first, my wife and I will rent the flat from my company 
  • we will look for a house to buy
  • once we find one we will move out and buy the house in our names
  • then the flat will be let out 

Can anyone think of any issues about this? In particular I’m thinking about CGT and Stamp Duty. Plus would the lenders have any issues?

Re stamp duty, would my wife and I be charged the surplus that applies to those who own more then one property? I’m obviously worried that if the company buys the flat that will count as the first transaction. Then when we buy our house, we’ll be viewed as already owning one property so will be hit with the 3% surcharge on our house (which is likely to be the more expensive property of the two).

I’d be really grateful for any thoughts. Thanks.

Charlie

 

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Hi Charlie,

 It all sounds good on paper however I don't think you can rent the flat back to yourself if you own the company. Also in getting a mortgage, the lenders will look at your finances.A lot of lenders try to make directors liable for the company mortgage. I'd advice that you speak to both a broker and a solicitor before you sell your flat.

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