Investing surplus cash from LTD in Property

[trying_to_survive]

Hello

I know this question has been asked several times over the years but none of the research I have done (just google and so on) I am able to find a clear answer.
There is so many mixed reviews.

The question being is say if you have a surplus cash and don't need the money for the next say 10 years - Is it a bad idea to invest in a flat or a house? For the purpose of illustration say the amount of surplus cash is £150K.

No mortgage will be taken. I understand any income (such as rent) we will have to pay tax on although the tax is deductible for any expense is incurred is deductible from this rent.

I know there is Capital Gains Tax to be paid on any profits - So for example, if the property in five years is sold for £200K then the CGT for the extra £50 is applied. Although I don't exactly know what the CGT rate is.

I am also aware that if the company is in touch the property as an asset is at risk also but that risk I am prepared to take.

It is not practical to take dividends out as in that example provided will take three years to get in my name - when that £150K could be put to use now.

Do you think this is workable please? Any critique?

Many thanks

 

[Newchodge]

Ltd companies do not pay CGT.

 

[WaveJumper]

Have a read here this will give you a basic outline of the pro's & con's. You should sit down with your accountant and tax advisor to look at your company and personal financial positions.

Pros and cons of buying property through a limited company

An increasing number of property investors and private landlords are buying property through a limited company. Find out why.

www.rapidformations.co.uk

Personally I would also add can the "surplus" cash not be used to increase the business, is it really surplus. You say you don't need it for 10 years, don't be too sure there is a general election on the horizon which could (probably) send the UK economy into a real tail spin, would your business survive if you have no "spare' cash to fall back on.

Of course another option is to use other peoples money, keep yours and get a mortgage.

 

[trying_to_survive]

Have a read here this will give you a basic outline of the pro's & con's. You should sit down with your accountant and tax advisor to look at your company and personal financial positions.

Pros and cons of buying property through a limited company

An increasing number of property investors and private landlords are buying property through a limited company. Find out why.

www.rapidformations.co.uk

Personally I would also add can the "surplus" cash not be used to increase the business, is it really surplus. You say you don't need it for 10 years, don't be too sure there is a general election on the horizon which could (probably) send the UK economy into a real tail spin, would your business survive if you have no "spare' cash to fall back on.

Of course another option is to use other peoples money, keep yours and get a mortgage.

Sound advice thank you !

 

[trying_to_survive]

Have a read here this will give you a basic outline of the pro's & con's. You should sit down with your accountant and tax advisor to look at your company and personal financial positions.

Pros and cons of buying property through a limited company

An increasing number of property investors and private landlords are buying property through a limited company. Find out why.

www.rapidformations.co.uk

Personally I would also add can the "surplus" cash not be used to increase the business, is it really surplus. You say you don't need it for 10 years, don't be too sure there is a general election on the horizon which could (probably) send the UK economy into a real tail spin, would your business survive if you have no "spare' cash to fall back on.

Of course another option is to use other peoples money, keep yours and get a mortgage.

Also just to add - It isn't really a "business" - its just money gained from contracting work instead of working as a full time employed and getting the money through LTD.

 

[Lisa Thomas]

Definitely worth speaking to an accountant about, for that level of investment.

If you would like a recommendation feel free to dm me.

 

[DanteMosley]

In my opinion, buying a property to rent out is a good way to make some regular money. It's true that you have to pay taxes on the rent you get, but you can take off costs like fixing things up, paying someone to manage the property, and insurance. This can help lower the tax you owe.