Limited company yes or no

[Grampa]

Knowing what you know now and in the current cilmate if you had to buy your first BTL (with plans to buy more in the long term) would you choose to purchase the property(s) in the name of a Limited Company? 

[Richlist]

Yes, yes and yes.

 

[Melboy]

Perhaps. If a person had sat down with me and pointed out the advantages of forming a Ltd. Company I could have been persuaded.     I guess what I am really saying is that I don't know enough about the subject really.  🙂

Anyone want to expand on the pro's and con's?    Is it worth doing that change over now?

[Richlist]

The problem with doing it retrospectively with an existing portfolio is that you will incur legal fees, estate agent fees and sdlt. And CGT.

Profits will be subject to Corporation tax instead of income tax. It's currently lower but who knows what the future holds.

You can take profits as dividends tax free but I believe that is now limited to £2K pa per director. If you take more its subject to Corporation tax and when you receive it you will also pay income tax on it.

It's more suited to larger portfolios rather than someone with one of two properties.

[Grampa]

If using a Ltd Co you can transfer the ownship of the company and therefore the properties and mortgages to another party. The down side is the mortgages will likely have the original person who took it out as a guarantor unless the lenders allows a change of guarantor.

Also I guess once rents start coming in you can take out funds up to the equivalent of any deposit put down when the property was purchased tax free because that amount may have been a loan to the Ltd Co for the purpose of the purchase.

RL may be able to confirm but I think mortgage payments may be tax deductible which is/has been phased out for personal BTL purchases 

[Richlist]

I haven't kept up to speed with tax rules for Ltd Companies so I only know a few snippets of information.

One thing worth pointing out is that interest rates on Ltd Co mortgages are usually higher and would require a personal guarantee and that will also apply to any loans that are taken out.

The estate agent who deals with my rentals has recently formed a Ltd Co for his personal rental portfolio. As I look up to him because he has a wealth of knowledge, experience and had many years in the business I would assume it's a worthwhile move.

[Grampa]

I have my first property about to complete for a Ltd Co and yes the mortgage rates are about 1%+ higher. 

[bil8999]

I now wish all my properties (41) were in my LTD 

[hickvranek]

If I knew what I know now, I would buy Bitcoin in 2014, make lots of money this way and then invest it all into real estate in the name of a Limited Company.
It would be the best decision in my mind, but who would have known it would happen. And now, everything is even more unstable because the economy is crumbling, and no one can tell what will happen next. My best Retirement saving strategy is now “Die with Zero” from Young and Thrifty. I don’t want any savings – I just want to have enough to live a more or less decent life. But even it seems difficult in the modern state of the economy.