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simon anderson

Setup LTD company and Mortgage

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Hi I currently have 4 BTL properties in my name, say average value is 65K and all have interest only mortgages.

 

My current plan is to setup a Ltd company and then transfer the 2 that havent increased in value into the new company (all have been bought in the last four years) and then leave two outside - as I don't want to eat into my capital gains allowance. It also means I can manage the two properties outside of my business from my Ltd company and charge 13-14%.

 

Other goal this year is to flip a property with my wife and leverage the personal CGT allowance.

 

1. I asked an accountant about setting up a LTD company and they wanted £800 to do this but think I should be able to do this my self for < £100 but not sure where to start  -any advice

2. Where do you find mortagages for Ltd companies and is there any benefit in wrapping the two properties into one commercial loan?

3. Does the above seem reasonable?

 

 

Any help greatly appreciated

Si

 

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Can't say about the implications of transferring property into a ltd company (stamp duty?), but, to set up a ltd company, our accountant charged £40 and that was the only thing we've paid him to date, so not just added onto other things.

As for mortgages, Aldermore do them that you can access direct, or go through a broker and there are a few other options available.

 

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Setting up a limited company directly yourself through Companies House is very straight forward and only costs £12. Just google BTL SIC code to make sure your choosing the right one and you're good to go. 

 

With regards to mortgages I think this is one area I'm definitely happy paying for the services of a broker experienced in SPV mortgages. I've gone with a friends recommendation who has so far surpassed my expectations, happy to recommend him directly.

 

All the best :)

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Although you can setup the ltd company your self for next to nothing, i paid my accountant about £100 and got all the right paperwork and various other bits including using his address as my HQ address so i could avoid publishing my home address in companies house. The £800 is similar to what i pay for my annual accounts.

Given all the costs involved in a LTd company, i am not worrying about an extra £100 for my accountant to handle the setup

I am on my 3rd mortgage application - all through a broker and N&P building society and have no major issues - other than they need me to personally guarantee repayment hence my no-property salary etc was scrutinised.

I had 1 property outside the company but have moved that in so i have a very clean setup i.e a salaried job and director of the Ltd company - no worries about personal taxation etc

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Thanks to all for their replies if anyone could recommend a mortgage broker i the North East that is familiar with LTD companies etc that would be great.

 

Also yes I think the £800 included sending in my yearly accounts and not just company setup.

Cheers Si

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2 hours ago, simon anderson said:

Thanks to all for their replies if anyone could recommend a mortgage broker i the North East that is familiar with LTD companies etc that would be great.

 

Also yes I think the £800 included sending in my yearly accounts and not just company setup.

Cheers Si

You don't need a local broker, just one who knows what they're doing for BTL.

There's Simon Allen who's a regular on here, who I've not used, but I can recommend Regents Court Financial in Wolverhampton (never been, but plenty of emails and chats with Andrew Clothier there). Sure others can suggest good brokers too

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No I avoided both as i transferred at 125k just before 3% rules came in and also i had refurbed so managed to show less than CGT profit.. I will end up with a large tax bill when i eventually sellup as property worth over 200k now..

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From everything that I have read when transferring you need to cover stamp duty - fortunately (depending on how you view it!) my properties are all priced 50K-80K. Although it does bring up another question - how / who decides the price of the sale to stop me just saying they were worth £10 each - I know that it wouldn't wash with HMRC so was wondering what others have done / whats expected legally.

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3 hours ago, debbie franklin said:

A transfer to limited company you are connected with must be at market value.

 

Deb

Deb, who decides market value? Getting 3 estate agents round to value will likely give 3 different answers. Does anyone check on what value you have sold to the limited company at?

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On 8/14/2018 at 11:46 AM, debbie franklin said:

If enquired into the District Valuer would put forward a value and you would have the opportunity to argue it. I would get 3 valuations and take an average.

Thanks Debbie

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On 9/7/2018 at 7:09 PM, david lamb said:

Whereabouts in the North east are you investing Simon? Im there too.

Hi David - I have a couple in Chester-le-street and a couple in Fencehouses. Where abouts are you based? Its always good to know someone else local working on property !

 

Currently looking for one to flip - do you use a local "finders" firm or do you just scour the estate agents and auctions?

 

Cheers Si

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On 10/21/2018 at 5:08 PM, simon anderson said:

Hi David - I have a couple in Chester-le-street and a couple in Fencehouses. Where abouts are you based? Its always good to know someone else local working on property !

 

Currently looking for one to flip - do you use a local "finders" firm or do you just scour the estate agents and auctions?

 

Cheers Si

Hi Simon,

 

I invest in stockton on tees and central Newcastle. 

I’m in the middle of a flip in newcastle currently and I just use estate agents normally though I have bought one at auction previously. Lots of deals to be had in the North east right now, it’s a great time to buy IMO. Fill your boots!

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On 10/23/2018 at 1:57 PM, david lamb said:

Hi Simon,

 

I invest in stockton on tees and central Newcastle. 

I’m in the middle of a flip in newcastle currently and I just use estate agents normally though I have bought one at auction previously. Lots of deals to be had in the North east right now, it’s a great time to buy IMO. Fill your boots!

 Cheers David - at the minute I'm struggling to find the right opportunity but will keep my eyes open - Si

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