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  • Mortgages & Finance

    Ltd mortgage let to directors

    Hi

    Does anyone know if Ltd BTL mortgage property can let out to its directors or not?

    thank you

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    It is not "Buy-to-Let" if an owner/controller of a company is residing there, it's a residential mortgage. There are no mainstream lender doing LTD Co residential mortgages.

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    _________________________________________________________________________


    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.


    _________________________________________________________________________



    A quick round of calls to our lenders has produced mixed results. I asked "If a Limited Company buys a BTL property, can a director of the Company reside in that property as a tenant?", and two of the answers received so far are as follows;

    1) "We would not be able to look at this enquiry. The director of the company will be party to the mortgage as he will have to give personal guarantees and therefore the property can only be let to individuals who are not connected to directly or through family members to the limited company. "

    ...however, also I have another response...

    2) "Yes they can, however we must be fully comfortable with everything else on the deal. Also, the rent we use must be either that paid or the market rent, whichever the lower"

    The answers above were provided by a mix of traditional and specialist BTL lenders.

    In summary, call our Brokers who have access to the widest range of lenders and we can then check your eligibility for the right type of deal.

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    If a director lives in a company property is it not taxable

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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.

    It can be considered a benefit but there are many instances where it is not.

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    Is ATED a consideration too?

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    This is a complex matter.

    Mortgage perspective - I think this will be a problem but there will be the off lender. It is like a caretaker house for school. That's not a BTL mortgage but a commercial owner occupied mortgage.

    Taxation - a whole range of issues here - ATED assuming value is >£500k (note need to file in advance not in arrears with ATED); Benefit in kind; lack of commerciality for transaction may jeopardise CT deductibility, no PPR, for starters.

    If you want to get in touch I can see how we can help you. stuart@johnsonsca.com or 0203 907 7022

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    Tax advisor and mortgage broker

    stuart@johnsonsca.com

    02039077022


    Definitely potential to be taxed as a 'Benefit in Kind".

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    Hi doubletiger,

    I have done a little research on this and contacted Legal & General Mortgage Club broker support.  They do not know of any lenders that will approve a Ltd Co BTL where one of the directors will be living in it. 

    The reason is that it looks like a ‘back door residential’ mortgage which involves the possibility of them granting what should be a non-regulated mortgage (by the FCA definition) but when the applicant/family member moves in it becomes regulated and therefore in breach of T&C’s. 

    So I contacted Foundation, Fleet, Aldermore, Kent Reliance and The Mortgage Works.  All of whom said ‘no’ too I am afraid.

    I hope this helps,

    Cat

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    Call the PT Broker Hotline on 0333 363 6507 or email us at ptbrokers@johncharcol.co.uk


    Thanks everyone imputs. It looks this is impossible task.

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