My client has a trading company and a property investment company. He wants to lend £50,000 from the trading to the property company and for the property company a to borrow the balanceon a mortgage and invest in property. His mortgage broker tells him interest rate on BTL for individuals are much lower than for companies. His friend's accountant has advised him that he can take the funds from the trading company and palce them in trust for the company which allows him as trustee to access lower mortgage rates and for the property to be bought and held in trust for the company which can receive the rent and claim the mortgage costs. I can't see how HMRC would see this other than a personal withdrawal from the cmpany as he has exercised his right as an individual to gift the funds to a trust. There is also the added legal costs of setting up the trust and reporting its tax each year....not to mention the outside possibility of thi being viewed as mortgage fraud?
Does anyone have knowledge of this arrangement and HMRC's position and do other accountants see company loans being dearer that BTL loans to individulas?