Purchase BTL as individual then transfer to ltd co / bare trust - works?

  • Filter
  • Time
  • Show
Clear All
new posts

    Purchase BTL as individual then transfer to ltd co / bare trust - works?

    Hi All,

    I read this article today and though I have searched existing topics I can't find anything on this (have seen some on SDLT impact). I'm thinking about the tax implications given lenders are refusing ltd companies more and more...


    Does anyone know whether this strategy works and if it does, is there a limit to how long you can have held the property as an individual. I will ask a financial advisor this week, but thought I might find some pearls of wisdom on here!


    When you create a bare trust, you change the beneficial ownership of the property (but not the title).
    I can't see many lenders allowing that.
    When I post, I am expressing an opinion - feel free to disagree, I have been wrong before.
    Please don't act on my suggestions without checking with a grown-up (ideally some kind of expert).


      If the ownership of property is passed from personal name to a "bare trust" which is managed by a limited company ( acting as letting agent ).

      Hmrc would treat the bare trust as owner of the property and require the trust to pay tax at 40%.


      Latest Activity


      • Reply to Switching mortgage to BTL and tax implications
        by Gordon999

        The taxman's method of calculating :

        Capital gain is the Sale Price ( say £200K ) minus Purchase Price ( say £130K ) = £70K capital gain.

        But buying and selling expenses are allowable and include the conveyancing cost : say £1K plus estate agent'...
        12-04-2021, 14:17 PM
      • Switching mortgage to BTL and tax implications
        by dotcotton999
        Evening all,

        I am currently looking to move house and also have a rental property that has around £200k equity in it.

        The rental house had consent to let and on a repayment mortgage and has 3 years to go until I can switch deals.

        I have spoken to a mortgage broker...
        08-04-2021, 19:52 PM
      • Reply to CGT and tax returns
        by Lots on
        Thank you for your kind words JP and the tips re using an accountant. Having been taxed at source all my working life this is very useful information. I will look round for an accountant. A friend of mine who is also a landlord as well as having a day job has one, so maybe a personal recommendation...
        12-04-2021, 10:04 AM
      • CGT and tax returns
        by Lots on
        Hello all, just need some advice re CGT. I have a house which I refurbished entirely, mostly in this financial year and I could start my tax returns on the 6th of April 2021. I spent nearly £30000. New kitchen and bathroom, re doing the garden, new flooring throughout ,total electrical re wire, re...
        02-04-2021, 09:46 AM
      • Reply to CGT and tax returns
        by jpkeates
        Thank you for your work in the NHS!

        I've found that the first sessions were the most valuable in terms of what could be saved, and the value has diminished slightly and the costs of the returns being done has stayed the same/slightly increased, so it feels like it's less worth it.
        12-04-2021, 08:28 AM
      • Reply to spreadsheet
        by jpkeates
        I use one page of a spreadsheet for all the income and expenses and have other pages which automatically summarise the data property by property.
        12-04-2021, 08:24 AM
      • spreadsheet
        by jase222
        I been looking at spreadsheets to list my expenses and every template I find seems to allocate expenses per house ie 5 houses = 5 separate sheets whereas I just put everything down on one sheet.
        I would like to know if I have been doing it wrong all these years.
        ​​​​​​Any help...
        11-04-2021, 13:53 PM
      • Reply to Switching mortgage to BTL and tax implications
        by jpkeates
        When you sell the property, you can't retain any of the equity, so that doesn't really make any sense to me.
        On disposal, the mortgage will end and have to be repaid.

        The value of the rental property when first let is also a limit to the amount of the loan against which interest can...
        12-04-2021, 08:22 AM
      • Reply to Switching mortgage to BTL and tax implications
        by dotcotton999
        Gordon999 thanks for your reply. In regards to CGT so if I was due to sell a house I could request to remove all the equity before the sale and wouldn’t be subject to CGT... that doesn’t seem right.

        In regards to switching my mortgage from repayment to and interest only... would I incur...
        11-04-2021, 19:31 PM
      • Reply to spreadsheet
        by Gordon999
        Its good to keep a separate sheet for each property because when you come to sell one house , you may want to show the rental and expenses records for one house to prospective buyers.
        11-04-2021, 19:08 PM