Limited Company Mortgages
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.
YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE.
Some Buy to Let mortgages are not regulated by the Financial Conduct Authority.
The information on this website is subject to the regulatory regime and is therefore targeted at consumers in the UK. No representations are made as to whether the information is applicable in any other country which may have access to it.
Providence Global Finance is a trading name of Just Mortgages Direct Limited which is an appointed representative of The Openwork Partnership, a trading style of Openwork Limited, which is authorised and regulated by the Financial Conduct Authority.
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