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Correct way of setting LTD up


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Hi all, I will be using an accountant to help set up a LTD company making sure it is set up in the most tax efficient way and legally. I'm here for some pre-advice and to gain some extra knowledge in the area as it is new territory for me. I am hoping for some replies of what you think would be the best way to do this for the long run.

The situation is:-

- I have 1 BTL mortgage valued at £155k with £85k mortgage left,  and 1 residential mortgage (which i live in) at £140k with £102k mortgage left, in England.

- Me and my partner are wanting to buy 1 property in Scotland between us - half and half with 25% deposit on a £127000 property. She also wants to buy another BTL property herself at £150k with 25% deposit, in England.

Would it be a good strategy to put the 2 new properties under a new LTD company but with a separate contract stating that she owns 1 by herself and the other we own half each? I believe it costs money for me to transfer my BTL over to the LTD company as it is not at the moment. I will also be transferring my residential mortgage over to a BTL mortgage towards the end of the year, but again believe it will cost me to transfer it over in the LTD company, is it best just leaving that as it is paying off the mortgage?

Also does anyone have any knowledge of the Scottish law and how the stamp duty would work in this current situation and strategy?

Hope it makes sense and look forward to hearing responses.

 

Regards

J

 

 

 

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A lot would depend on your income and long term goals. Sometimes buying in own name and then transferring to a company later is actually more cost effective (although can be fiddly). You can have different numbers and classes of shares with properties attaching to shares or even create subsidiaries within a group structure (lots of paperwork and costs). A shareholder's agreement can be used to help document arrangements. I believe the Scottish LBTT should be 4% on a £127k; about £5k. Good luck and you can always contact me if you need further help with your requirements.

Jerome

Jerome@TaxAntics.co.uk

www.TaxAntics.co.uk
 

 

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