brown_a Posted April 21, 2006 Report Share Posted April 21, 2006 I aim, for pension purposes, to buy 2-3 properties over the next 5 years to rent out and eventually sell (one or more) to provide for a pension. Do you know if it's worth buying them through a limited company rather than simply filling out the property pages on the IR forms? Might it be easier to borrow with a ltd company too? Any guidance would be appreciated. Many thanks. Annie Link to comment Share on other sites More sharing options...
ianstew Posted April 22, 2006 Report Share Posted April 22, 2006 The advice I was given from the Bank Manager was that if I set up as a business and take out business loans instead of mortgages to buy the properties. I could therefore use any exisisting property i had as an asset and it could be held against another property that I intended to buy which saved me putting down deposits. I have not took this advice as I am not running a business and do not intend buying any more property at the moment but my friends have and they think it is great (they now have 4 properties). Hope this helps a little and good luck Link to comment Share on other sites More sharing options...
vodkawoman1 Posted April 23, 2006 Report Share Posted April 23, 2006 I own eight properties and have since 1999. I have been advised that there is no advantage in forming a limited company as you would have to sell the properties to the company(therefore incurring stamp duty!!) and as a limited company you also have to file accounts etc every year. At the moment I fill in a land and property part of a self assessment form for IR at the end of the tax year. Hope this helps and if anyone knows any different, please email me mhairipm@aol.com Link to comment Share on other sites More sharing options...
Trenners Posted April 24, 2006 Report Share Posted April 24, 2006 Hi Annie, I started to build my buy to let portfolio (8 properties now) inside a limited company but was strongly advised (by my accountant) to move them out (into my own name) which I did (at some considerable cost because I had to buy them off my company and pay stamp duty as a result). I am not an accountant - and you should really get professional advice about this - but here are some of the reasons why I hold property outside a limited company. 1) Individual personal tax allowances can be used to offset any tax payable on rent received. This is really important if your main source of income is going to be rent from your properties. Any income / rent paid to a company is liable to corporation tax. No personal allowances can be offset. 2) Individuals have an annual Capital Gains allowance (and also get taper reliefs) - whereas Limited companies get no Capital Gains allowances or reliefs. So, when you retire and want to sell the properties, if the company sells then you will pay corporation tax on EVERYTHING. 3) Commercial loans are not as cheap as individual buy to let mortgages. ie: a commerical loan will probably cost you at least 1.25% over base rate whereas a buy-to-let mortgage will be more like 0.75% (or less) over base rate. Hope that helps .... Mark Link to comment Share on other sites More sharing options...
brown_a Posted April 24, 2006 Author Report Share Posted April 24, 2006 Again you guys, thank you very much - much more food for thought. I think I'm going to rethink how I buy this property, the individual route's looking good - I've done some reading around but there's nothing like hearing from people with experience. Greatly appreciated. Link to comment Share on other sites More sharing options...
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