Moving to LTD

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    Moving to LTD

    Hello!

    I have a high income via PAYE on my day to day job, so the BTL income pushes me high into top tax brackets and I generally have huge tax liabilities.

    Thinking of moving some properties to LTD. Am I too late to the game? How long do you think the current rules will last and it won't be a waste of resources to pay stamp duty and any cgt due to transferring to ltd only for rules to change in a couple of years time?

    Also what lenders are you guys using and what are rates like at the moment?

    Thanks!

    #2
    If you are in the 40% tax bracket, then your rental income will also be taxed at the same rate.

    Companies pay corporation tax at 19% ( but this may go to 25% in 2023 if the company's annual profit exceeds £50K )

    Interest rates for mortgage loans to companies are higher compared to interest rates for properties held under personal name.

    Comment


      #3
      Company borrowings have the benefit of having a lower rental stress Calculations compared particularly to High Rate Tax Payers which can prove a major USP in securing competitive long term funding.
      Without question many clients have chosen to use an SPV to buy properties, how long the tax concessions will continue is open to debate and as we all accept Landlords & BtL are in the headlights of all political parties. Given the parlours state of the economy following Post Covid the CofE could readily take steps to marginalise any advantages available to Ltd Co’s , when is the big question.
      I do not consider Ltd Co rates as being significantly higher than those for individuals , the rates depending on the Loan to Value are only marginally higher but taking account of the tax concessions on mortgage interest plus more generous rental stress calculations have been the driving force of moving BtL activities via SPVco’s.
      Might I suggest that before you proceed further , seek out a suitably qualified Chad/ Certified Accountant and discuss all aspects of such a move.

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