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  • Buy-to-Let

    Your Company will live on after you have gone

    I had a PPI check performed last year, it went back about 30 years. The consultant was very positive that they would recover £000's as I had a long and varied credit history. I didn't receive a penny! Even as a youngster, I couldn't see the point in paying for something I didn't need, even though it was considered the norm at the time.

    I have a similar view to limited liability. What am I getting for the addition £1000 or so in administration fees? Unless the company could be sued or charged for something that was not covered by insurance, it seems to serve little purpose. If I remain unencumbered there is little risk of debt recovery and if I borrow I will have to guarantee the debt anyway. I may as well save the fees.

    Although it doesn't concern me, an ULtd also offers some privacy as the accounts are not in the public domain.

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    I have a similar view to limited liability. What am I getting for the addition £1000 or so in administration fees?

    So why not just stay as a sole trader then? Fees on an Unlimited company would be even higher than on a limited due to the unconventional nature.

    Although it doesn't concern me, an ULtd also offers some privacy as the accounts are not in the public domain

    Incorrect,  this would still be on companies house, because it's, err, a company.

    Sole Trader is where you would get privacy.

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    I'm not currently a sole trader, I'm the beneficiary of a trust. I would like to include my daughter in this and pass the legal ownership indirectly to her, whilst retaining the beneficial ownership. It would be possible within a trust format but it becomes complex and expensive. A company format is much simpler and cheaper. Sole trader appears the most expensive route as far as the tax man is concerned, especially the inheritance palaver and the possibility of care fees. As DL originally stated 'Your company will live on after you have gone'. I don't think it has to be a Ltd company.

    I don't know the answer with regard to mortgage fees, I'll ask the question in the mortgages tribe just out of curiosity. However, the accounting fees are typically lower for a uLtd because there is no need, in most cases, to file accounts.

    From the horses mouth:

    Unlimited companies need only deliver accounts to Companies House if, at any time during the period covered by the accounts:

    • the company was a subsidiary undertaking or a parent of a limited undertaking
    • the company was a banking or insurance company (or the parent company of a banking or insurance company)

     https://www.gov.uk/government/publications/life-of-a-company-annual-requirements/life-of-a-company-part-1-accounts

    As usual, I'm happy to be corrected.

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    Ok, so I see why you want to go the company route rather than sole trader.

    But are you saying the only reason you want to go ULtd rather than Ltd is because of more privacy?

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    Privacy doesn't concern me, it may be useful to others.

    The company format suits me, but I can't see the point in paying an accountant around £1000 a year to file my accounts when I don't need the limited liability. What I struggle to comprehend is why people choose to pay to file their accounts and then circumvent the limited liability by guaranteeing the mortgage.

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    I'd break this down into two parts:

    The company format suits me, but I can't see the point in paying an accountant around £1000 a year to file my accounts when I don't need the limited liability.

    You'll still need to DO accounts for HMRC purposes though, you're paying an Accountant to do the accounts regardless of whether they're filed with companies house or not, so I'm not convinced you'll actually see a cost saving.

    For a company (regardless of whether ltd or ULtd), if it's straightforward I.e. just a few properties, it probably wouldn't cost £1000, more like half of that or you could very easily learn to do it yourself, I did my own in the early days before my business got larger and more complex,  it's a doddle!

    What I struggle to comprehend is why people choose to pay to file their accounts and then circumvent the limited liability by guaranteeing the mortgage.

    If people intend to pay off the loans, then they would see the guarantee as a temporary measure which will disappear when they become unencumbered, if it's the only way they can get lending then needs must.

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    Thank you John, the penny has finally dropped!

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    Hi D,

    Have you considered that if you became non UK resident and lived in Portugal you could sell up and pay very little cgt as you can rebase to July 2015.


    There is no iht in Portugal but getting rid of your UK domicile can take about 20 years so may be avoiding UK iht may be difficult.

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    Hi Bill

    I don’t want to sell

    but if I did I would consider Portugal

    regards DL

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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.