***BUYING PROPERTY THROUGH LTD COMPANY***![Haus 🏠](https://abs.twimg.com/emoji/v2/72x72/1f3e0.png)
![Augen 👀](https://abs.twimg.com/emoji/v2/72x72/1f440.png)
![Haus 🏠](https://abs.twimg.com/emoji/v2/72x72/1f3e0.png)
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!![Fettes weißes Häkchen ✅](https://abs.twimg.com/emoji/v2/72x72/2705.png)
![Fettes weißes Häkchen ✅](https://abs.twimg.com/emoji/v2/72x72/2705.png)
![Fettes weißes Häkchen ✅](https://abs.twimg.com/emoji/v2/72x72/2705.png)
Pro’s vs. Cons![Nerd-Gesicht 🤓](https://abs.twimg.com/emoji/v2/72x72/1f913.png)
![Pfeil nach unten ⬇️](https://abs.twimg.com/emoji/v2/72x72/2b07.png)
![Pfeil nach unten ⬇️](https://abs.twimg.com/emoji/v2/72x72/2b07.png)
![Haus 🏠](https://abs.twimg.com/emoji/v2/72x72/1f3e0.png)
![Augen 👀](https://abs.twimg.com/emoji/v2/72x72/1f440.png)
![Haus 🏠](https://abs.twimg.com/emoji/v2/72x72/1f3e0.png)
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!
![Fettes weißes Häkchen ✅](https://abs.twimg.com/emoji/v2/72x72/2705.png)
![Fettes weißes Häkchen ✅](https://abs.twimg.com/emoji/v2/72x72/2705.png)
![Fettes weißes Häkchen ✅](https://abs.twimg.com/emoji/v2/72x72/2705.png)
Pro’s vs. Cons
![Nerd-Gesicht 🤓](https://abs.twimg.com/emoji/v2/72x72/1f913.png)
![Pfeil nach unten ⬇️](https://abs.twimg.com/emoji/v2/72x72/2b07.png)
![Pfeil nach unten ⬇️](https://abs.twimg.com/emoji/v2/72x72/2b07.png)
![Pfeil nach unten ⬇️](https://abs.twimg.com/emoji/v2/72x72/2b07.png)
PROs: ![Fettes weißes Häkchen ✅](https://abs.twimg.com/emoji/v2/72x72/2705.png)
• Tax efficiency - if you’re a higher rate tax payer (we’re all on £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
![Fettes weißes Häkchen ✅](https://abs.twimg.com/emoji/v2/72x72/2705.png)
• Tax efficiency - if you’re a higher rate tax payer (we’re all on £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
![Augen 👀](https://abs.twimg.com/emoji/v2/72x72/1f440.png)
• Limited Liability - Because it’s a Ltd company, you will not be personally liable
for any losses meaning creditors only have access to the company’s assets.
• Long term, there are inheritance tax benefits i.e you can make family members shareholders in your company.![Normale Familie (Mann, Frau, Mädchen, Junge) 👨👩👧👦](https://abs.twimg.com/emoji/v2/72x72/1f468-200d-1f469-200d-1f467-200d-1f466.png)
![Lächelndes Gesicht mit offenem Mund und Angstschweiß 😅](https://abs.twimg.com/emoji/v2/72x72/1f605.png)
• Long term, there are inheritance tax benefits i.e you can make family members shareholders in your company.
![Normale Familie (Mann, Frau, Mädchen, Junge) 👨👩👧👦](https://abs.twimg.com/emoji/v2/72x72/1f468-200d-1f469-200d-1f467-200d-1f466.png)
![Geldsack 💰](https://abs.twimg.com/emoji/v2/72x72/1f4b0.png)
• 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.![Geldsack 💰](https://abs.twimg.com/emoji/v2/72x72/1f4b0.png)
• Through a Ltd company you can reinvest the rental income/profit from the business into more property/marketing etc.
![Geldsack 💰](https://abs.twimg.com/emoji/v2/72x72/1f4b0.png)
• Through a Ltd company you can reinvest the rental income/profit from the business into more property/marketing etc.
![Fettes weißes Häkchen ✅](https://abs.twimg.com/emoji/v2/72x72/2705.png)
CONs !["Betreten verboten!"-Zeichen 🚫](https://abs.twimg.com/emoji/v2/72x72/1f6ab.png)
!["Betreten verboten!"-Zeichen 🚫](https://abs.twimg.com/emoji/v2/72x72/1f6ab.png)
!["Betreten verboten!"-Zeichen 🚫](https://abs.twimg.com/emoji/v2/72x72/1f6ab.png)
• There are more costs/paperwork involved i.e accountancy fees and preparing year end accounts for submission to your accountant
• Buy-to-let mortgage rates through Ltd companies tend to be slightly higher than if you were buying personally![Tabelle mit Aufwärtstrend 📈](https://abs.twimg.com/emoji/v2/72x72/1f4c8.png)
![Tabelle mit Aufwärtstrend 📈](https://abs.twimg.com/emoji/v2/72x72/1f4c8.png)
!["Betreten verboten!"-Zeichen 🚫](https://abs.twimg.com/emoji/v2/72x72/1f6ab.png)
!["Betreten verboten!"-Zeichen 🚫](https://abs.twimg.com/emoji/v2/72x72/1f6ab.png)
!["Betreten verboten!"-Zeichen 🚫](https://abs.twimg.com/emoji/v2/72x72/1f6ab.png)
• There are more costs/paperwork involved i.e accountancy fees and preparing year end accounts for submission to your accountant
![Memo 📝](https://abs.twimg.com/emoji/v2/72x72/1f4dd.png)
• Buy-to-let mortgage rates through Ltd companies tend to be slightly higher than if you were buying personally
![Tabelle mit Aufwärtstrend 📈](https://abs.twimg.com/emoji/v2/72x72/1f4c8.png)
![Tabelle mit Aufwärtstrend 📈](https://abs.twimg.com/emoji/v2/72x72/1f4c8.png)
![Tabelle mit Aufwärtstrend 📈](https://abs.twimg.com/emoji/v2/72x72/1f4c8.png)
• Mortgage Availability is more limited through Ltd company with less products available, although this is changing fast.![Mann gestikuliert „Nicht OK“ (durchschnittlich dunkler Hautton) 🙅🏾♂️](https://abs.twimg.com/emoji/v2/72x72/1f645-1f3fe-200d-2642-fe0f.png)
• 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
![Mann gestikuliert „Nicht OK“ (durchschnittlich dunkler Hautton) 🙅🏾♂️](https://abs.twimg.com/emoji/v2/72x72/1f645-1f3fe-200d-2642-fe0f.png)
• 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: ![Happy man raising one hand (durchschnittlich dunkler Hautton) 🙋🏾♂️](https://abs.twimg.com/emoji/v2/72x72/1f64b-1f3fe-200d-2642-fe0f.png)
![Happy man raising one hand (durchschnittlich dunkler Hautton) 🙋🏾♂️](https://abs.twimg.com/emoji/v2/72x72/1f64b-1f3fe-200d-2642-fe0f.png)
![Happy man raising one hand (durchschnittlich dunkler Hautton) 🙋🏾♂️](https://abs.twimg.com/emoji/v2/72x72/1f64b-1f3fe-200d-2642-fe0f.png)
There are many ways to extract funds from a Ltd Company via:![Gesicht mit Geld-Mund 🤑](https://abs.twimg.com/emoji/v2/72x72/1f911.png)
![Gesicht mit Geld-Mund 🤑](https://abs.twimg.com/emoji/v2/72x72/1f911.png)
![Gesicht mit Geld-Mund 🤑](https://abs.twimg.com/emoji/v2/72x72/1f911.png)
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.
![Happy man raising one hand (durchschnittlich dunkler Hautton) 🙋🏾♂️](https://abs.twimg.com/emoji/v2/72x72/1f64b-1f3fe-200d-2642-fe0f.png)
![Happy man raising one hand (durchschnittlich dunkler Hautton) 🙋🏾♂️](https://abs.twimg.com/emoji/v2/72x72/1f64b-1f3fe-200d-2642-fe0f.png)
![Happy man raising one hand (durchschnittlich dunkler Hautton) 🙋🏾♂️](https://abs.twimg.com/emoji/v2/72x72/1f64b-1f3fe-200d-2642-fe0f.png)
There are many ways to extract funds from a Ltd Company via:
![Gesicht mit Geld-Mund 🤑](https://abs.twimg.com/emoji/v2/72x72/1f911.png)
![Gesicht mit Geld-Mund 🤑](https://abs.twimg.com/emoji/v2/72x72/1f911.png)
![Gesicht mit Geld-Mund 🤑](https://abs.twimg.com/emoji/v2/72x72/1f911.png)
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.
![Älterer Mann (durchschnittlich dunkler Hautton) 👴🏾](https://abs.twimg.com/emoji/v2/72x72/1f474-1f3fe.png)
![Angespannter Bizeps (durchschnittlich dunkler Hautton) 💪🏾](https://abs.twimg.com/emoji/v2/72x72/1f4aa-1f3fe.png)
![„Schweigen ist Gold“-Gesicht 🤐](https://abs.twimg.com/emoji/v2/72x72/1f910.png)
1. Refurbishment costs
![Schh!-Gesicht 🤫](https://abs.twimg.com/emoji/v2/72x72/1f92b.png)
2. Legals
![Fettes weißes Häkchen ✅](https://abs.twimg.com/emoji/v2/72x72/2705.png)
3. Lettings agency costs
![Schh!-Gesicht 🤫](https://abs.twimg.com/emoji/v2/72x72/1f92b.png)
4. Cleaners
![Fettes weißes Häkchen ✅](https://abs.twimg.com/emoji/v2/72x72/2705.png)
5. Travel costs 0.45p per mile if you’re properties are far away
![Lügendes Gesicht 🤥](https://abs.twimg.com/emoji/v2/72x72/1f925.png)
6. Furnishings
![Lügendes Gesicht 🤥](https://abs.twimg.com/emoji/v2/72x72/1f925.png)
7. All landlord safety check certificates
![Fettes weißes Häkchen ✅](https://abs.twimg.com/emoji/v2/72x72/2705.png)
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. ![Memo 📝](https://abs.twimg.com/emoji/v2/72x72/1f4dd.png)
![Memo 📝](https://abs.twimg.com/emoji/v2/72x72/1f4dd.png)
![Memo 📝](https://abs.twimg.com/emoji/v2/72x72/1f4dd.png)
![Memo 📝](https://abs.twimg.com/emoji/v2/72x72/1f4dd.png)
![Memo 📝](https://abs.twimg.com/emoji/v2/72x72/1f4dd.png)
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
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).
![Schlüssel 🔑](https://abs.twimg.com/emoji/v2/72x72/1f511.png)
!["Betreten verboten!"-Zeichen 🚫](https://abs.twimg.com/emoji/v2/72x72/1f6ab.png)
![Fettes weißes Häkchen ✅](https://abs.twimg.com/emoji/v2/72x72/2705.png)
!["Betreten verboten!"-Zeichen 🚫](https://abs.twimg.com/emoji/v2/72x72/1f6ab.png)
!["Betreten verboten!"-Zeichen 🚫](https://abs.twimg.com/emoji/v2/72x72/1f6ab.png)
![Fettes weißes Häkchen ✅](https://abs.twimg.com/emoji/v2/72x72/2705.png)
!["Betreten verboten!"-Zeichen 🚫](https://abs.twimg.com/emoji/v2/72x72/1f6ab.png)
Love, light & prosperity.
![Folded hands (durchschnittlich dunkler Hautton) 🙏🏾](https://abs.twimg.com/emoji/v2/72x72/1f64f-1f3fe.png)
![Folded hands (durchschnittlich dunkler Hautton) 🙏🏾](https://abs.twimg.com/emoji/v2/72x72/1f64f-1f3fe.png)
![Folded hands (durchschnittlich dunkler Hautton) 🙏🏾](https://abs.twimg.com/emoji/v2/72x72/1f64f-1f3fe.png)
![Folded hands (durchschnittlich dunkler Hautton) 🙏🏾](https://abs.twimg.com/emoji/v2/72x72/1f64f-1f3fe.png)
#property