***BUYING PROPERTY THROUGH LTD COMPANY***πŸ πŸ‘€πŸ 

I spoke to a CHARTERED accountant yesterday & asked a bunch of questions about buying property through a Ltd company vs Buying personally to rent out.

Let me go straight into it & hope this helps! βœ…βœ…βœ…

Pro’s vs. Cons πŸ€“β¬‡οΈβ¬‡οΈβ¬‡οΈ
PROs: βœ…
β€’ Tax efficiency - if you’re a higher rate tax payer (we’re all on Β£100k+ so this includes everyone), you will pay corporation tax at 19% of the PROFIT rather than 45% of your rental income tax. There are also rumours the corporation tax will be going to 17% lets see πŸ‘€
β€’ Limited Liability - Because it’s a Ltd company, you will not be personally liable πŸ˜… for any losses meaning creditors only have access to the company’s assets.
β€’ Long term, there are inheritance tax benefits i.e you can make family members shareholders in your company. πŸ‘¨β€πŸ‘©β€πŸ‘§β€πŸ‘¦πŸ’°
β€’ Multiple shareholders - if you have family/partner who earn a lower salary you can pay them a salary/dividends & take full adv of their tax allowance.πŸ’°
β€’ Through a Ltd company you can reinvest the rental income/profit from the business into more property/marketing etc.βœ…
CONs 🚫🚫🚫
β€’ There are more costs/paperwork involved i.e accountancy fees and preparing year end accounts for submission to your accountant πŸ“
β€’ Buy-to-let mortgage rates through Ltd companies tend to be slightly higher than if you were buying personally πŸ“ˆπŸ“ˆπŸ“ˆ
β€’ Mortgage Availability is more limited through Ltd company with less products available, although this is changing fast.πŸ™…πŸΎβ€β™‚οΈ
β€’ Transferring a current property into a Ltd company comes at a significant cost. If the value has increased you will be subject to capital gains & SDLT
Other comments: πŸ™‹πŸΎβ€β™‚οΈπŸ™‹πŸΎβ€β™‚οΈπŸ™‹πŸΎβ€β™‚οΈ

There are many ways to extract funds from a Ltd Company via:πŸ€‘πŸ€‘πŸ€‘
1. Directors Loans
2. Salary
3. Dividends - 2% tax rate annually
4. Pensions - these are tax deductible and you can send them to a SIPP to be accessed at 55.πŸ‘΄πŸΎ
πŸ’ͺ🏾🀐Allowable expenses include everything used for the business i.e:
1. Refurbishment costs 🀫
2. Legalsβœ…
3. Lettings agency costs🀫
4. Cleanersβœ…
5. Travel costs 0.45p per mile if you’re properties are far awayπŸ€₯
6. Furnishings πŸ€₯
7. All landlord safety check certificatesβœ…
All in all depending on your strategy if you’re looking to invest in rentals 4 the long term & want to start building generational wealth, a Ltd co looks like the best option. However, you need to be clear on your strategy. πŸ“πŸ“πŸ“
Another thing to mention is that it seems like setting up the Ltd co before you get a buy-to-let will save you ££££’s

πŸ”‘Key point also: Due to tax reasons it may be best to have separate Ltd companies if you’re flipping properties as well as a rental portfolio (seek advice).
πŸš«βœ…πŸš«DisclaimerπŸš«βœ…πŸš«- this is information I have been given by a chartered accountant so with everything financial always do your own research. I hope this helps.

Love, light & prosperity. πŸ™πŸΎπŸ™πŸΎπŸ™πŸΎπŸ™πŸΎ
#property
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