Limited Company Buy to Lets

We have access to Lenders happy to accept applications from Special Purpose Vehicles (SPVs), LLP partnerships as well as brand new and existing Limited Companies

Considering the Overall Strategy

If you are considering purchasing rental properties in a Limited Company, you need to consider the overall strategy, looking at the tax implications as well as the mortgage products available. As with all investment decisions, there are pros and cons which will need to be carefully weighed up!

If you have already made that decision, or indeed already own properties in a corporate structure we can help you to expand your portfolio, restructure it or simply refinance it to, for example, improve the rate of interest, extend the term or raise funds against it.

This is where the Team at Willowlace can work carefully with your Tax Advisors so that you can make an informed decision as to the correct way forward for you.

Here are some of the issues you need to discuss:

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Potential Pros

  • Limited companies are currently unaffected by the tax relief changes, and can deduct the interest as a business expense, with Tax Relief at the current Corporation Tax rate.  When compared to the personal rates of tax, the lower Corporation Tax could look attractive.
  • There may be other issues which need to be discussed with your Tax Advisor eg inheritance issues, rollover relief, capital gains tax etc etc.

Potential Cons

  • The cost of setting up and running a Limited Company, and the additional administration requirements.
  • Stamp Duty implication to sell existing properties into a Limited Company.
  • Capital Gains Tax implications for selling existing properties into a Limited Company.
  • Far narrower market of Lenders currently, resulting in generally higher rates of interest.  Many Lenders do not currently offer the free legal fees and free valuations found in remortgaging privately owned buy to let properties.
  • Lenders’ underwriting criteria may be more onerous, varying enormously on what represents an acceptable Limited Company structure.