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  • Tax

    Limited Company or in my own name

    It would be great if I could gain some advice from someone - I am a FTB looking to BTL in London for around £350k 25% deposit

    And then looking to get something up north in Leeds 110k 50% deposit.

    Should I get both properties in my own name or both in a limited company or the first in my own name and the second in a limited company for stamp duty purposes?

    Would be great to get some advice.

    Thanks

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    Hi Joseph,

    Ahhhhh, the $64 million dollar FAQ!

    A general comment - If you are not a higher rate tax payer and keep your LTV's under 60% LTV then it is likely that you should purchase as a sole trader.

    I am not a tax advisor, so hesitate to give any advice as it is highly personal to you and this is one of the rare cases when forums are not the best source of advice, and you should seek professional and insured advice that is bespoke to your personal circumstances.

    However, I can direct you to resources that discuss this question:

    The BIG tax issue: Should I incorporate? 

    Why BTL incorporation is an expensive mistake 

    What is Section 24 for landlords? 

    ​Hope that helps for starters?

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    I am not currently a higher tax payer - although I expect to be in the future - and LTV would be about 75%

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    Don’t put the cart before the horse

    just because your going to be a higher rate tax payer in my opinion is not grounds to set up a company

    pay the tax due from s24 it’s a better bet than forming a ltd co

    forming a company being your a higher rat tax payer is a big red herring

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    Learn Change and Adapt ?????

    All comments are for casual information purposes only. If you wish to rely on any advice I have given please ensure you obtain independent specialist advice from a third party. No liability is accepted for comments made.


    If you have a job & intend to rent out property you could be quickly pushed into a higher rate band due to the way S24 is calculated. For example HMOs have high "income" which now cant all be written off as costs if you have a mortgage.

    I have properties in my own name & ltd company. If you are relying on property income it is extremely difficult to extract £ from company, so consider really do look at pros & cons

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    Own name.

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    Tony Gimple

    Founding Director

    Less Tax For Landlords

    0203 735 2940

    Hi Joseph

    Echoing Vanessa's comments, you do need to get some professional advice from someone who understands your situation.  There isn't one size fits all with something like this.  Personally I use a mixture of limited companies and partnerships.

    Your adviser will need to understand what you want to achieve from your investment.  For example, sharing ownership with third parties, or passing onto children, can be easier in a limited company.  Your adviser will also want to know your growth plans - if you're going to stick at two houses then a sole trader may be okay, but if you want to build, a company may offer some better advantages (e.g. limited liability, tax relief on interest).  There are costs to running a company though and you will almost certainly need an accountant.  When borrowing you will need to give Personal Guarantees (PGs) which can be time consuming and expensive.


    Graham

     



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    If you are trying to avoid S24 only I would   Say stay in your own name

    forming a company can give you a lot of taxation and regulation

    seek professional advice from an account who understands BTL

    not all do ???

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    Learn Change and Adapt ?????

    All comments are for casual information purposes only. If you wish to rely on any advice I have given please ensure you obtain independent specialist advice from a third party. No liability is accepted for comments made.


    Hi,

    If in your own name, up to how many properties. At the moment I have 10 in a limited company and 30 in joint names

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    I have some in my own name and some in a company.

    I think ut depnds on what you want to use BTL for. If it is for retirement planning then a small company  looks a good option. You can pay your profits into a directors pension tax free. When you retire you could start paying a salary of 8k and a 2k dividend . keeping tax low.
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