Limited Company Buy to Lets

You can choose to hold a Buy to let property in your own name(s) or you might choose to hold some or all of your let properties under a limited company.

The best time to make this decision is when you are buying the property

If you subsequently decide to transfer your portfolio to a limited company you are likely to pay Capital Gains Tax, Stamp Duty and legal fees on the transfer

In order to buy a property under a limited company, you would need to set up a limited company first

This is quite easy to do but bear in mind the following;

The company should be a ‘special purpose vehicle’ (SPV) restricted in what it can do. A general purpose trading company is unlikely to be accepted by the majority of mortgage lenders

Mortgage Lenders will want to know the SIC (Standard Industrial Classification) codes that you have set

These codes should be restricted to:

68100 : Buying and selling own real estate

68209: Other letting and operating of owned or leased real estate

68320: Management of real estate on a fee or contract basis

It is very likely that ALL Directors will be asked to provide Personal Guarantees for the mortgages

Please bear in mind that Directors under the age of 21 may not be acceptable to some Mortgage Lenders due to an age exclusion

Some lenders restrict the number of Directors to two or four (for example). If you have six directors, you will severely restrict the number of lenders available to  you

This is not an ‘easy’ decision and there are pros and cons to holding property in your personal names OR holding property under a limited company

We recommend that you take advice from a qualified tax adviser or Accountant to get a full understanding of the issues involved

Who will provide a mortgage for Limited Companies

There are several lenders that offer mortgages to limited companies

For example,

Precise Mortgages

Fleet Mortgages

Paragon Mortgages

We can help find the best limited company buy to let mortgage for you.

For mortgages of at least £100k we do not charge any broker fees.

Please fill in our Enquiry form

Advantages to holding Buy to let property under Limited Company

• The company will pay Corporation tax on the Company profits at the current rate of 19% (tax year 20/21).
• The Limited Company can deduct ALL of mortgage interest as a business expense
• Property will be held under the Limited Company. The Limited Company can be transferred to another owner instead of the individual properties changing hands
• There may be inheritance tax advantages from holding property under a limited company

Disadvantages of holding Buy to let property under a Limited Company

• Mortgage rates are currently higher for limited companies – please contact us for further information
•  You will need to file annual accounts with Company house
•  Dividends withdrawn from the limited company will be taxed at 7.5% (Basic rate taxpayers 2021/11) or 32.5% (Higher rate taxpayers 2021/22)
• There is a higher level of administration required

We can arrange your Limited Company buy to let  mortgage – please fill in Your Enquiry now!