Mortgage relief and LTD

[philip cooper]

As it stands now I will not be effected by the changes to mortgage interest relief being reduced to the basic rate of tax. However if I buy anymore it could effect me if not now when interest rates rise. What I was thinking is leaving the properties I have now registered in my name and then any future ones I purchase place them in a LTD. This would save me from transferring all current properties into a LTD at cost which would not change anything financially .

Will I be able to get a LTD mortgage. ? Will they be able to take the income from the properties held in my name for the mortgage on a property to be held in a LTD

Is there anything I should consider with this and does it sound like it makes sense and it would work ?

Views appreciated.

Thanks

[Hooper]

Hi Phillip,
Firstly, are you sure the change will not affect you?
If you add back the annual cost of your interest and finance to your taxable income last year, do you stay in the same tax bracket?

[philip cooper]

Yes from a spreadsheet what I have done I stay in the same tax bracket, I uploaded my figures on here and people said it looked correct. I do not have any other income you see. And I am not very heavily geared as half of my properties are purchased cash.

The only way it will effect me is if I get a normal job and this income gets added. Daft as this was the plan eventually once done with property. Great incentive to get into employment. Well done Tories !!!

[jpkeates]

I'm in a similar position.
I've stopped buying or selling anything to see how this washes out.

There's a chance that the proposed change will be varied (it's been a surprise to everyone I've shared it with - so it might simply go away).

There will - I suspect - be some new financial products from lenders, that make things easier for the changes we're looking at.
Otherwise the impact will also be felt by lenders, as BTL borrowing personally is less appealing than through a company.

It's something to consider and be aware of, but right now it feels too soon to actually restructure - the picture isn't yet clear.

[Gordon999]

philip cooper,

You need to apply to a few lenders offering LTD mortgages and ask for " mortgage offer in principle". They usually ask for personal guarantee from the Director who must have other assets to back up the gaurantee. So if you can show yourself having adequate assets , then you will get a LTD mortgage.