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  • Tax

    Using funds from personal savings or LTD Co

    Hello everyone! I had a couple of questions before I look into setting up my LTD company, I am not sure if I have selected the right tribe to raise these so apologies in advance;

    1. If Im going ahead with a JV strategy and decide to invest in a good deal with a investor/developer, would this be better if done via a (my) LTD company or on my own (without incorporation)? Any advantages/disadvantages to both?

    2. How would I use funds from my personal savings/bank accounts towards investing under my LTD company? Say I was getting a LTD company mortgage, would the deposit have to come from my business bank account (if so how does it get there) or can it come from my personal bank account.

    3. Would the method I use to invest (i.e. invest from personal savings or invest through LTD company) differ as per the strategy I use? Or is it a given that for a HRT payer a LTD company is the best way forward?

    Just trying to get my head around all the information thrown at me over the last couple of weeks. My goal is to build a decent portfolio and make it tax efficient for me whilst doing so. Hopefully the experts can shed some light...

    TIA Smile

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    1. Id lean towards a LTD Company.

    2. You can use your personal funds. You just transfer it to your business bank accoun & subsequently to the solicitor (they dont often mind if you send it to solicitor from pers

    3. I would again lean towards LTD Company for HRT. Its not a given LTD Company BTL does have its costs but id certainly go this route.

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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.


    _________________________________________________________________________


    Thanks for your views Adam Hosker!

    I guess I need to discuss my whole case/plans with a property accountant and look at advantages/disadvantages in detail in line with my personal circumstances and exit strategies. I will save on tax but on the other hand I will pay more and make up for the saved tax if expanding my business. I am particularly concerned about higher mortgage rates, higher legal costs, personal guarantees and limited or expensive options when releasing equity...catch 22!!!

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    If you release equity from your resi property and invest as a sole trader don't claim tax relief on those residential borrowed funds as S24 makes it pointless.

    You simply lie as to the origin of funds or you will be clobbered for S24 taxes.

    So just borrow the money and stick it into a savings account for about 1 year.

    Feed it into the savings account over a period of months ;  then you have plausibility  of savings and no S24 risk on finance costs whether you want to claim them or not.

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    @paul_barrett - same applies to releasing equity from a BTL? And what if the BTL was in the LTD Co portfolio?

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