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So im a first time buyer aged 22 with a fairly profitable ltd company selling digital fitness plans ect so virtually no overheads. However ive got great cashflow and capital building up that I now wish to spend on property. Mainly BRR via bridge to let finance. Should I set up a new LTD company to buy property with or buy in my existing one?
If I set up a new LTD company would I be able to loan funds from my existing company every month? call it a 0% loan as im director of both. As long as i Pay all the corporation tax from the profits of the first company HMRC shouldnt have a problem with me loaning the remainder to my new LTD?
We can do mortgages for Trading Companies at Bespoke Finance but the choice of lenders is severely limited.
Mortgage Lenders are not fond of trading companies, for example, a customer may claim against the digital fitness part and the property they have money secured on could be in question. They would rather it be in a "Special Purpose Vehicle (SPV)" where such claims, in a separate legal entity can not reach it.
You will want to talk to an accountant on how to structure the inter-company loans. What is the best for Tax Purposes for example for your circumstances is best known by someone who can advise on Tax.
Trading Company or SPV - would love to assist with your limited company buy to let at Bespoke Finance on 08009202001 or email firstname.lastname@example.org
We do quite a bit of Bridge-to-Let or Renovate-to-Let as some may call it for property investors.
We wrote an article about the Advantages and Disadvantages of Limited Company Buy-to-Let a while ago.
In 2000 there was no more than 5,000 Limited Company set up for Buy-to-Let, seven years later in 2017 alone 35,000 were established. The increase came about due to the Conservative 2015 Summer Budget reducing mortgage interest relief for landlords holding property in a personal name. Limited Company Buy-to-Let became an overnight hit.
_________________________________________________________________________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._________________________________________________________________________
I would keep it separate and invest in your own name
Use a SPV as a second choice its not as good as personal ownership
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.
You should tell the que outside.
I think if you can keep it personal its much better
A company needs a lot of thought
The reason I think most are going LTD is S24
But I think its a mistake long term unless your doing it for other reasons other then S24
Speak to a qualified tax advisor, there are different methods and different tax implications for inter-company loans, some favourable and some not.
I believe you can lend through loans, directors, shareholders or dividends, but I've no idea of the implications of each.
Ask your accountant about tax free dividends to a holding company.