BTL under LTD (New here)

[AshDM]

Hey all,

I am new here, just finished university and looking to invest in my first buy to let.

I am currently looking at a few flats which I am interested to invest it, I will be getting hold of a mortgage under the name of a parent. My question is, what are the advantages of holding the asset under a limited company? I have heard so much about reduced tax rates, i.e business related costs and depreciation to offset.

Any advice you could give to someone who is just starting out?

Regards,

Ash

 

[arcon5]

If your mum will own it then how do you propose putting it in a Ltd company? :s

It's not like you being the registered keeper of a car somebody else owns

 

[AshDM]

Everything will be under their name, I will control and manage all finances etc.

 

[arcon5]

So you will be operating as an agency? Or will you be sub letting?

In terms of drawing profits ltd is more tax effective and you would take your tax free allowance out under PAYE then rest as dividends to reduce NI liability. Usually becomes more cost effective at about £15k+

 

[AshDM]

Kind of, my money invested, parents name and company, me just doing all the paper work, collecting rent etc so that one day when I'm earning enough I can take full control.

 

[tony84]

Its very difficult for Ltd companies to get a mortgage - near impossible at start up.

One way around it might be for your mum to own the property and then set up a ltc ompany to manage everything - effectively your company would be your only little letting agents? - i wouldnt want to go into the tax advantages/disadvantages thats more for an accountant.

On BTL mortgages, you will need a minimum 20% deposit (but the rates improve drastically with a 25% mortgage).