Browse All Tribes or choose a Tribe below:
By signing up I agree to Property Tribes Terms and Conditions
Already a PT member? Log In
Sign Up With Facebook, Twitter, or Google
By signing up, I agree to Property Tribes Terms and Conditions
Already a PT member? Log In
Don't have an account? Sign Up
To reset your password just enter the email address you registered with and we'll send you a link to access a new password.
I own a few buy to let properties and thinking of forming a company. Has anyone done that before?
What things to I need to consider before deciding to form a company?
Would I need financial/legal advice in order to make my decision?
Could someone recommend any online finance/legal advice?
Thanks in advance for your responses.
(*Moderator note: Comment removed as breach of T & C's*).
What are you wanting to do with the company.
Sell your current BTLs into it? (talk to accountant about tax)
Buy new BTLs into it? (talk to a mortgage broker)
Set up company to manage your current stock. (talk to an accountant)
This may be helpful : What you need to know: Limited Company Buy to Let FAQ
_________________________________________________________________________The above post is not financial advice, its often me rambling - passing time on a coffee break.If you are looking for the Best BTL Mortgage? Call the Specialist Team at Bespoke Finance._________________________________________________________________________
You need to sit down and think hard first
Then after you know what you want to achive from property Go and see a Tax Advisor
It took me around two weeks to really understand property investment via a Company
I was on the phone to my Tax advisors every day because I needed and answer
I had been a Landlord for over 30 years so buying a property and managing a property was not an issue
The same skills you use be personal BTL or Company BTL are the same
But its the taxation of the two sectors you need to understand
Both have strong and weak points
I have been running the Company for two years and I still seek advice
get to know the basics
Shares & the Law
One big point you need to understand as a Director is the Company money and assets are not yours
You have to do the best you can for the company
You cant just dip your hands in the account to take cash out
to remove cash from the company has to be paid via salary or dividends
Its a learning curve
you can ask general questions here but you need specific advice as every landlord is different
Learn Change and Adapt ?????
Forming a company was always on my radar after 4 properties and i could not justify the expense and besides not enough equity. And lender fees and commercial lending rates at the time.
Restictions of taking money out being main issue.
But i do not understand portfolio landlords who did not form limited liability ringfencing their homes pre 2014. I mean if you had 5+ plus properties why would protect against bankrupty.
Maybe wishfull thinking but i hope government give a 3% stamp duty exemption to do so in near future.
Coming soon Investorsk8.com
Wisdom - an integration of knowledge, experience, and deep understanding that incorporates tolerance for the uncertainties of life as well as its ups and downs.
Does that ringfencing work both ways and are there exceptions?
Interesting times. I guess the question can only be truly answered once full details are known.
Naturally we all want to avoid the dreaded section 24 if in fact one has borrowings. To simply sell existing BTL's to a limited company will no doubt incur stamp duty and CGT!
There is also a matter of IT if in fact that particular tax concerns you.
It would seem to me that an ideal way to avoid both is to, if possible, recognise a partnership between you and your wife/partner/son/daughter assuming you manage your own business and do not ask others to carry out the tasks. Transfers from a Business partnership to a limited company can be free of stamp duty and CGT if carried out correctly by a qualified CTA. A well constructed employees trust to which 51% or more of the new company's shares (issued to acquire the properties from the partnership) is transferred should reduce significantly IT
constructed employees trust
Rangers FC lost a case with HMRC with the above ????
Rangers were avoiding millions of pounds in PAYE by using employee benefit trusts to "loan" cash to players.
Transferring shares in a limited company to an EBT for succession planning is a million miles away from Rangers FC.
Can I ask you - would you Guarantee 100% there would not be an issue with this sort of thing?
... and if there was a challenge from HMRC would you compensate the Directors if they lost the case in future years and pay all the costs to defend it in court against HMRC.
As a chartered tax advisor, I have to have professional indemnity insurance.
If I am engaged with a client, then they can sue me if my advice is incorrect.