Tax effect if I incorporate my lettings business?

  • Filter
  • Time
  • Show
Clear All
new posts

    Tax effect if I incorporate my lettings business?


    I have six flats which are rented out. I am considering becoming a Limited company and transferring the flats, which are currently in my own name, which have buy to let mortgages outstanding. (interest only).

    I am wondering what others do with a simlar portfolio sizes, my fixed assets current MV is about £600,000, which mortgage debt of approx £400,000.

    Also, is it easier to obatin finance through a Limited company as opposed to a sole trader, are there better deals available..

    Thanks in advance


    Too difficult a question to answer in less than a five page letter, really. Depends on what you want for your business. Personally, I wouldn't bother. The admin (filing accounts, etc.) and risks of double tax charges (once in the company, and once when distributed to you) make companies hard work.


      thanks for the reply..

      The two things that made me think are:

      1) Limited liability, I comply with all the legislate and safety regulations, but didnt want to be sue'd personally and loose my personal home and assets should something go wrong.

      2) Is finance cheaper thorugh a comapny, as the lender will see a healthy balance sheet and see less risk than a sole trader.



        Incorporating your rental business could land you with a CGT and SDLT liabilities - it might have been different if you were just about to start the business.

        As a broad generalisation, a company is better at sheltering income, whereas an individual is better off CGT-wise.

        Personal finance has been cheaper than company finance in recent years - might change with the current credit crunch etc.


          thank you for reply..


            With corporate manslaughter etc. I don't think you would find it makes much difference. With decent insurance, and decent letting agents, you should not have much worry on that front.


            Latest Activity


            • Reply to Advice
              by SouthernDave
              I started my limited company a year before buying the first property, then bought a second 2 months later, a third 3 months after that, a fourth 5 months after that and so on to where I am now. Our lenders have never said they want a separate company per property. Ive never heard of that, if it were...
              23-01-2022, 17:40 PM
            • Advice
              by jhoggard

              I currently have a property rented out in my own name with a fair bit of equity around 50% LTV this is actually a repayment mortgage which i'm looking to switchover to a interest only. When i do this i'm also taking money out of the property to put towards another which i'm looking...
              20-01-2022, 14:25 PM
            • Reply to Advice
              by jpkeates
              I don't think we disagree.

              The OP has one property and is looking to buy a second.
              At that point in that business, lenders will want a company per property.

              There's a point where that ceases to be the case, when the portfolio gets big enough, or, presumably when someone...
              23-01-2022, 17:34 PM
            • Reply to Advice
              by SouthernDave
              i concur with this, once you get over 4 properties, they consider you to be a portfolio landlord and want to start seeing cashflow forecasts before lending to make sure the company is buoyant. Directors guarantees each time but no limits on number of properties or number of dofferent lenders....
              23-01-2022, 16:50 PM
            • Reply to Advice
              by JamesHopeful
              This is not true in my experience. I currently have eight properties in the same company, across a number of different mainstream BTL lenders, and none of them have batted an eyelid at the number.

              Where I have known lenders worry about the company is it doesn't have the correct SIC code...
              23-01-2022, 16:28 PM
            • Reply to Advice
              by theartfullodger
              Depends to a great degree on tax regulations over the coming years. We only know what the rules are today, not what they'll be in future e.g. when you retire

              I expect chancellors to cut back on the advantages of people owning property through companies (well, wouldn't you if you were chancellor)...
              22-01-2022, 13:06 PM
            • Reply to Advice
              by Gordon999
              1. No. You have not sold the property yet

              2. 19% on profit by company.

              3. Seek advice from accountant.
              22-01-2022, 09:36 AM
            • haring inherited property
              by halfax
              i am inheriting a property and would like to place half in my grandsons name.
              as anyone done similar?...
              19-01-2022, 18:12 PM
            • Reply to haring inherited property
              by halfax
              thanks for help to everyone who replied, great forum
              21-01-2022, 18:55 PM
            • Reply to Looking for tax / financial advice for a BTL /holiday let long-held portfolio
              by ifallelsefails
              I watched a webinar from Landlord studio and this man Tony Gimple was featured in it. Have a look at his Linkedin profile:
              He has a website whereby he consults exactly to your situation:
              21-01-2022, 17:13 PM