Since 2017, it has become more common for buy-to-let investors to acquire or transfer their properties into corporate holding structures such as Limited Companies, Partnerships and Trusts. While these corporate wrappers can be viewed as more tax efficient ways of owning investment properties, there are other costs which should be factored in before making your decision.

Many of the high street mortgage lenders tend not to support these types of mortgages, so you become forced into the hands of more specialist lenders who tend to charge higher rates of interest and arrangement fees. These holding structures can involve additional running costs which you wouldn’t expect as a landlord owning properties in a personal name, such as preparation of company accounts and statements which can usually involve fees being charged by an accountant.

However, there are many benefits to purchase via these structures which can include: the ability to offset all of your mortgage interest costs; the choice to have up to four applicants own the property which will allow the division of the profits to be split between more people; or the ability to involve children as minority shareholders (<20%) for future inheritance planning.

Deciding to invest as a private Landlord or under a corporate holding structure should not be taken lightly, and you should seek advice from a tax advisor to ensure you are making the right decision to fit your plans and aspirations.