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  • Mortgages & Finance

    Pros & cons - Ltd company portfolios

    I know in my own world debts of my company come first for payment

    if I was not making profit I would not fund my pension

    other may do other things but not me

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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.

    The "Less or more expensive mortgage options" is coming down bit by bit, we have more and more lenders joining the LTD Company route.
    You only have to see The Mortgage Works now offering Limited Company Buy to Let - at the same rate as in personal name.

    The "Higher transfer costs" is a pain. Except id not list it as a disadvantage, as its an option to switch or not.
    I think most will keep properties in existing name (or sell to swap existing added value stock, with works required stock to add value).

    I wrote Limited Company Buy to Let – Advantages and Disadvantages a while ago now, probably needs updating.
    One of the ones in there is stuff like - Life Insurance / Health Insurance which can be paid out of the company as an expense.
    Therefore not taken out of personal income, allowing you tp pay yourself less for taxation. Company Car, etc.. other bits and bobs.
    I also like the idea of selling shares in a SPV rather than selling properties individually. Given lower taxation for buyer and seller.
    It also allows simpler succession planning in my opinion.


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    _________________________________________________________________________


    My posts are not financial advice, just a rambling guy passing time on a coffee break.
    The team at Bespoke Finance offers advice, including Limited Company Buy-to-Let , HMO Conversion and Cheap Life Insurance.

    _________________________________________________________________________


    The stamp duty and cgt can be avoided on incorporation if you form a partnership first and work more than 20 hours per week in your business.

    Dividend tax is only 7.5 per cent at the basic rate.

    Dividend tax can be avoided completely if you move to portugal


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    The dividend tax is after corporation tax has been paid so they need to be added together to compare with personal tax rates.

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    If you don’t require an income a company formation works well

    a company costs more to run and the Accoutants run a fine thooth comb over the accounts

    if you are a higher rate tax payer and wish to withdraw profits it’s much higher tax than personal BTL

    in my opinion if your only trying to avoid s24 a company is not the place to be

    a company wrapper is like a Xmas present looks lovey with s24 but when you open the wrapping paper the present is half the size as you though in the first place

    it’s not as good as some think it is

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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.


    I have to say that I dont agree DL.

    I cant really see much negative about company structures.

    It's easier to beat IHT which is a major consideration.

    It's not so good if you sell BUT if you pass your assets to your beneficiaries on death you never need to sell so CGT is deferred forever.

    You can always transfer your company into a REIT so again avoiding CGT

    The Corp Tax will drop to 17% and the dividend tax at the basic rate just 7.5%.The first £2k of dividends are tax free.

    If you live abroad you can completely avoid the Dividend tax.

    With the threat of s.24 I regret not attempting to incorporate some time ago.

    If your only source of income is say £50k in your company,by the time you take it out you will be left with £38.5k which seems ok to me.

    I have to say I think too many people on Property Tribes have been too negative about the limited company. It's a tried and tested structure so no worrying about whether its legal or not.

    As long as you stay in the basic rate band for dividends your total tax rate is about 22 per cent. If you set your limited company up right now you can avoid IHT so you dont have to worry about it when you are nearing your death.

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    Plus the ability to create different class shares for your children and grand children

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    Can anyone point me in the direction of a Company with articles of association giving different shares classes for children which I can look at please ?

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    I haven't got an example but I found this article very informative:

    https://www.ftadviser.com/investments/20...companies/

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    A good teacher must know the rules; a good pupil, the exceptions.

    Martin H. Fischer