Buying a BTL through my LTD company which Icurrently own as a private individual, problems?

Buying a BTL through my LTD company which...

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 Buying a BTL through my LTD company which I currently own as an individual, problems?

ie I am registered as the owner of the property and will be selling it to my LTD company.

 My business does not deal in property at the moment but will likely have spare cash - enough to buy the BTL property.

I expect to use my max dividend amount so that I only pay the lower amount in tax.

Does anyone see any problems with this?

I won't be living in it - so no benefit in kind.

Capital gain - I understand there may be more for the company to pay in the future but buying the property can save in the interrim (50k transferred to me as the property is bought by the company which will earn interest and a greater income from rent which the LTD company will earn)

Replies (2)

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By jon_griffey
23rd Jun 2011 12:12

BTL in ltd co
There are lots of issues here. The main objection to this is as you have already identified is the fact that more capital gains tax is likely to be paid in the future. You can get a double tax charge - once when the company eventually sells the property and again when you wish to draw the cash from the company. Although you say that you do not intend to live in it, circumstances change and by keeping it in your personal name you can choose to live in it for a period and get a large chunk of PPR exemption, annual exemption (two lots if in joint names), you can leave it to children when you die and so on. You are so much more restricted in a company. There are other issues such as what happens if the company goes bust, will the company qualify for Entrepreneurs Relief, Business Property Relief, small profits rate of CT and so on. What you are proposing is to my mind a very short term fix. I prefer to look at the longer term, even if that does mean taking some tax on the chin now.

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By nonsenseman
23rd Jun 2011 18:13

Difference in value over 10 years

  Thanks for your reply.

Using 2 couples the most I can save on capital gains tax is £3600 at current levels. If this released more money per annum in the interrim perhaps it is a better bet.

 

 

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