The pros and cons of going ltd

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    The pros and cons of going ltd

    I have heard that by going ltd still attracts full mortgage interest tax allowance so there must be some pitfalls by doing this as I would assume everyone would be moving to a ltd company. Can anyone one explain in detail the pros and cons , thanks

    #2
    Mortgage rates are higher and they want personal guarantees, just started looking into this, obviously you cant claim cgt either if selling

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      #3
      I thought the whole idea of ltd was to take any liability away from your personal assets ? It certainly used to be when I was in the building trade as I had a few companies go bust on me and I couldn’t pursue them for their personal assets purely what was left from the companies assets.

      What at exactly do you mean when you say you can’t claim CGT when selling is this a lesser amount of tax than company tax ? As in my mind you don’t claim CGT you pay it.

      thanks

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        #4
        It will have been an explicit condition of the loan that the director guaranteed it personally. I f you tried that for a building contract, the chances are that the contractor would simply refuse to bid.

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          #5
          The lender wanted me to personally guarantee the loan, as to them its a new company so I understood that. I mean when you come to sell their is no cgt relief like when a sole trader

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            #6
            Hi all,

            I just wanted to add my tuppence worth into this discussion as I have experience with both personal BTL's and Ltd company structures -

            I have found that the mortgages in Ltd company structures are nothing short of a nightmare in terms of the interest rates and the hoops you need to jump through during the purchase, be prepared for endless paperwork, bank statements etc. Any problems on the Home Report and you will find more issues adding up quickly.

            When you are in the mortgage product be prepared for the fact that at the end of the term you may well not be able to restructure it easily and may be put onto a default product (I was recently told by Aldermore that they simply didnt have a product available and went onto a bumped up rate for 6 months).

            My personal take on it now is that the saving in tax is probably offset by the hassle and poor interest rates, I would like to stay away from the Ltd structure for now.

            Matthew

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