2nd BTL advice

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    2nd BTL advice

    Good Evening I’m hoping to get some advice if possible.

    I currently own 1 property which is owned out right and currently valued at £90k giving me a £450pm return .
    I'm now contemplating looking into another property circa of 100k . I’ve been advised the best option would be to remortgage my other rental using a interest only mortgage and then then use funds for the deposit on another property again with a interest only mortgage .
    I was told I should also set up a Limited Company and out the houses through this . How does this sound and along with possibly getting an accountant is there anything else I should consider or look at with regards to a second property.
    Any advice would be most helpful.


    Raising capital on your present property is indeed positive advice, although funding is available to 80% I would suggest a prudent level of gearing being either 70/75%.
    Mid you intend to transfer the property into a new Limited Co then beware, HMRC will treat the transfer as a Sale & Purchase which means a potential Capital Fains Tax liability on your part and for the Company there will be Stamp Duty with a 3% SDLT premium if you have another property ( including main residence)
    once the Sale & Purchase is complete the remortgage can be undertaken by the company and possibly simultaneously with the purchase of the second property.
    Borrowing via the Ltd Co has slightly better tax advantages compared to financing in a personal capacity; in addition the rental stress calculation is more generous particularly if you are a Higher Tax payer. At this point I stress the importance of discussing the implications with a quality accountant, either Certified or Chartered, this will ensure you know exactly what you are getting into with such an arrangement.
    Interest Rates for Ltd Co BtL’s are not too adrift of normal BtL rates.
    Hope this helps.


      Thank you for the advice I think it maybe better to leave the 1st property out of the ltd company ... as you say the stamp duty etc will result in further charges etc .
      I appreciate the advice so thank you again


        Always glad to help and welcome to the Forum


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