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Invest as individual or limited company?


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Hi all, 

Looking for some advice! Completely lost and have a long term (almost terminal) case of analysis paralysis!

Situation
Mortgage on a flat valued at £215k. £66k left to pay on the mortgage. £30k in savings.
We'd like to move up the ladder to a house, but keep the flat as a long term investment. 

Strategy
Move the flat to a LTB, buy a house with our savings and the equity released from the flat. 
As individuals our mortgage in principle figure is £261k.
The max we can release from the flat is £161k.

We are trying to understand what is the most tax efficient option, convert the LTB as a company or as individuals? 

Is the above even achievable?! 

Thank you in advance!

Goose

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Hi @Goose,

Your accountant will be able to best advise you on the tax benefits of purchasing property through a limited entity. Higher rate and additional rate tax payers generally prefer this route. 
 

If your new Ltd Co. (SPV) purchased the flat you would be liable for 3% additional stamp duty and other costs, mortgage & valuation fees, conveyancing. The rates would be higher too most likely than Let to Buy (LTB) terms. 
 

Purely from a mortgage perspective the most cost efficient way is the one you’ve already mentioned. (Though worth checking standard BTL products against LTB rates)

All the Best

Scott

 

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