If you put a property into a Ltd company several things happen; 1. You pay corporation tax on top of income and capital gains tax. 2. Your personal information at Companies House is available for everyone to see. 3. Increased costs in submitting accounts. A Ltd company only has benefits if you have a large mortgage or borrowings on the property, especially if you scale up for a large portfolio. With the net zero agenda and Renters Reform Bill in the UK the BTL game is over. Landlords no longer have complete control or right of possession as in the past. As a professional landlord of over 20 years selling and investing outside of the UK was the best thing I ever did.
The double taxation, once in the company and again when taking dividends or salary to actually get the money, is something that is often forgotten when people set up Ltd companies. It patently unfair to normally buy a property with after tax savings, take all the risk and then get taxed again on profit and then again on withdrawal. It's an unbalanced transaction with HMRC.
Complaining it is unfair is just silly. Those are the rules, if you don't like them, don't buy property like this. Now being a ltd company what you could do is make director's pension contributions straight into your SIPP. This means you now have zero corp tax as pensions are 100% deductible, and you don't pay any other type of tax either whilst you build your pension as a SIPP is a tax wrapper ... you can stick £60,000 tax free per annum into this. That would be a very sensible way to build a great pension portfolio.
@@mrscreamer379 hi there. Yes this is exactly what I am doing with my flips, but many people go into property to make a living, not longer term wealth on retirement as a priority. It's the risk reward element that grates with me ( i take all the risk and HMRC none, and the fact that I have already contributed tax at 40% in my day job already before making any investment. It's no surprise that many businesses prefer to work in cash ( rightly or wrongly). I don't have a problem paying tax to find public services and support, I just wish it was fairer and supported entrepreneurship and businesses more.
It’s been a while since I looked at ltd co but last I did, the way to get around some of the double tax was to do a directors loan for the deposit(s). The rental income is in the Ltd is paid becomes repayment of loan which. Only individual tax is on the interest. Runs out of course once the loan amount (the deposit) is paid.
Thank you so much, guys. Im opening my limited company this year so I can buy my first buy to let and these videos are so helpful. You know another video that you guys could create? The benefits that you can bring to you personally for having a company, like, can you buy a car with a cheaper rate loan? Cheaper contracts of mobile or broadband? It would be awesome to learn
This was gold, thank you. As a 40 per cent tax payer with a high mortgage this sounds like something I really should do. But I already have my 1 BTL in my personal name. Do you have any videos on whether it is worth selling your property to a new ltd company you set up?
I created a self directed Roth IRA trust to hold some of my investments. All profits are tax free, even here in California. I realize not everyone has that option, but I have heard that a similar, but somewhat taxable arrangement is also available for an ISA in the UK.
Hi both, great video!! Yes for the position of director (the decision maker) can be easily added or removed from a Ltd. company, but the owner is still the company shareholder(s), which is subject to stamp duty when considering shares transfer to the next generation.
I’ve heard you can open a limited company for EACH property… do you think this is useful?? Or better to just have them all under 1 limited company?? Please let me know… also love this channel guys you lot are cold 🔥🔥🔥
If I’m a small business owner, can I open a new property investment ltd and then a holding company that will own both, and then move profits from company A to Holding Company and then to property investment company before corporate tax in company A?
Hi guys. great video. 1 point i wanted to expand on. You cant claim back the interest on the mortgage now as an expense right? Instead you get a 20% rabate on the total mortgage paid?
hi lia and ak, your videos and thumbnail can be edited better and can be improved, do you need editor? let me know, so i can share portfolio your videos are actually helpful, just subscribed your channel.
So basically this works if you are a serial property investor with a substantial rental income and doesn’t need mortgages to finance the investments and buys property in cash instead.
It cost me about 2,500 dollars, 2 years ago. I set up a trust, which was the same cost as an LLC, but you get better liability protection (which I didn’t need) with the LLC. I did it all through Madison Trust. Don’t pay an accountant or lawyer for this. P.S. There are fees to maintain an LLC or Trust.
Could I put my personal property (my home) into a Ltd company? then when it comes to inheritance tax I can just pass the company onto my family. also, if this is possible, couldn't I deduce my mortgage payments ?
No, your personal residence and expenses can’t be deducted, but you can place your home into an LLC or Family Trust in most States. That is what I have done to pass it on easily to my heir, as my late parents did with me.
You may wish to consider changing your video title "Never buy investment properties in your personal name" to something else as it could be construed as financial advice. For my personal situation, my accountant advised to continue purchasing the properties through my personal name instead of a limited company.
@@JimmyBob708double taxation; paying corporation tax in the Ltd Company and then personal tax on any monies transferred from the Ltd company to myself.
@@JimmyBob708 double taxation. Firstly corporation tax through the limited company, and then personal tax if you pay yourself from the limited company.
I was always concerned that this was done to protect you in the event that a tenant comes with some type of lawsuit....but is it fair to say the insurance on each property should/could cover a lawsuit?
I’ll help you out…. The best way to do it is hybrid… Hold property in both your own name and limited company…. And if you are buying in your own name you can avoid tax by continuing refurbs…
How about "Never BUY Investment Properties..." because houses are homes, not financial products? Are you blind to the situation tens of thousands of families are in, because of "investors" like you?
Without investors like them the problem will be even bigger mate. Ye they are in it for the money but they transform single lets into multiple units for more renters to afford. In capitalism not everyone can afford to buy.
@@odysseasv7138 You don't think that a significant reason property prices are so high, is because of buy-to-let? And cramming more people into the same space, has downsides (unless you're a landlord of course).
@@kcnmsepognln of course it has downsides. But we are in an environment of that nature now where there's just not enough houses. It's supply and demand, nothing to do with landlords or home-owners. The situation is as it is because of decisions of the past governments and high population increase. And keep in mind politicians have inflated these prices(by introducing schemes that SUPPOSELY helping others to step on the ladder and not building enough) more than anyone because their 'friends' are super landlords.. If one hopes that with the reduction of BTL landlords prices would drop, that one to be naïve..
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If you put a property into a Ltd company several things happen;
1. You pay corporation tax on top of income and capital gains tax.
2. Your personal information at Companies House is available for everyone to see.
3. Increased costs in submitting accounts.
A Ltd company only has benefits if you have a large mortgage or borrowings on the property, especially if you scale up for a large portfolio.
With the net zero agenda and Renters Reform Bill in the UK the BTL game is over. Landlords no longer have complete control or right of possession as in the past.
As a professional landlord of over 20 years selling and investing outside of the UK was the best thing I ever did.
What country?
Good ridduns 😂
@@davedavids2231sounds like a Dubai know all, living in a refrigerated box in middle of nowhere
@@369dabbler *riddance 👍🏽
The double taxation, once in the company and again when taking dividends or salary to actually get the money, is something that is often forgotten when people set up Ltd companies. It patently unfair to normally buy a property with after tax savings, take all the risk and then get taxed again on profit and then again on withdrawal. It's an unbalanced transaction with HMRC.
Complaining it is unfair is just silly. Those are the rules, if you don't like them, don't buy property like this. Now being a ltd company what you could do is make director's pension contributions straight into your SIPP. This means you now have zero corp tax as pensions are 100% deductible, and you don't pay any other type of tax either whilst you build your pension as a SIPP is a tax wrapper ... you can stick £60,000 tax free per annum into this. That would be a very sensible way to build a great pension portfolio.
@@mrscreamer379 hi there. Yes this is exactly what I am doing with my flips, but many people go into property to make a living, not longer term wealth on retirement as a priority. It's the risk reward element that grates with me ( i take all the risk and HMRC none, and the fact that I have already contributed tax at 40% in my day job already before making any investment.
It's no surprise that many businesses prefer to work in cash ( rightly or wrongly).
I don't have a problem paying tax to find public services and support, I just wish it was fairer and supported entrepreneurship and businesses more.
agree 100%
This is what my accountant explained to me and advised to keep the properties in my personal name.
It’s been a while since I looked at ltd co but last I did, the way to get around some of the double tax was to do a directors loan for the deposit(s). The rental income is in the Ltd is paid becomes repayment of loan which. Only individual tax is on the interest.
Runs out of course once the loan amount (the deposit) is paid.
Thank you so much, guys. Im opening my limited company this year so I can buy my first buy to let and these videos are so helpful. You know another video that you guys could create? The benefits that you can bring to you personally for having a company, like, can you buy a car with a cheaper rate loan? Cheaper contracts of mobile or broadband? It would be awesome to learn
How's it been, Sam, 8 months down the road?
@ I postponed to next year, waiting the rates to come down a bit more
This was gold, thank you. As a 40 per cent tax payer with a high mortgage this sounds like something I really should do. But I already have my 1 BTL in my personal name. Do you have any videos on whether it is worth selling your property to a new ltd company you set up?
I created a self directed Roth IRA trust to hold some of my investments. All profits are tax free, even here in California. I realize not everyone has that option, but I have heard that a similar, but somewhat taxable arrangement is also available for an ISA in the UK.
Hi both, great video!! Yes for the position of director (the decision maker) can be easily added or removed from a Ltd. company, but the owner is still the company shareholder(s), which is subject to stamp duty when considering shares transfer to the next generation.
Hi, great video. Who was the lender that did not ask you to pay PG, please?
I’ve heard you can open a limited company for EACH property… do you think this is useful?? Or better to just have them all under 1 limited company?? Please let me know… also love this channel guys you lot are cold 🔥🔥🔥
It's fine to avoid tax!
If I’m a small business owner, can I open a new property investment ltd and then a holding company that will own both, and then move profits from company A to Holding Company and then to property investment company before corporate tax in company A?
Hi guys. great video. 1 point i wanted to expand on. You cant claim back the interest on the mortgage now as an expense right? Instead you get a 20% rabate on the total mortgage paid?
hi lia and ak, your videos and thumbnail can be edited better and can be improved, do you need editor?
let me know, so i can share portfolio
your videos are actually helpful, just subscribed your channel.
So basically this works if you are a serial property investor with a substantial rental income and doesn’t need mortgages to finance the investments and buys property in cash instead.
What would accountancy fee be for setting up & complying with companies house & corporatiom tax, etc? Say if i had 1 property in the company?
It cost me about 2,500 dollars, 2 years ago. I set up a trust, which was the same cost as an LLC, but you get better liability protection (which I didn’t need) with the LLC. I did it all through Madison Trust. Don’t pay an accountant or lawyer for this.
P.S. There are fees to maintain an LLC or Trust.
Costs me £500 for a non VAT registered accountant. Others using larger firms are normally around £1000.
A lot of information in a short video. Great content for the property investor.
Could I put my personal property (my home) into a Ltd company? then when it comes to inheritance tax I can just pass the company onto my family.
also, if this is possible, couldn't I deduce my mortgage payments ?
Yes you could as long as you didn’t live in it
@@Paulie44 oh, no I want to live it it . Ok thanks for the advice
No, your personal residence and expenses can’t be deducted, but you can place your home into an LLC or Family Trust in most States. That is what I have done to pass it on easily to my heir, as my late parents did with me.
You don't have to be the guarantor yourself every time, I think other companies can be the guarantor as well.
Incorporate and bank offshore don’t pay any tax.
never say never - NEVER is ALWAYS wrong.
I like this video!😊❤
Its only 40% for the amount over 50k btw. Video is misleading.
You may wish to consider changing your video title "Never buy investment properties in your personal name" to something else as it could be construed as financial advice.
For my personal situation, my accountant advised to continue purchasing the properties through my personal name instead of a limited company.
Out of curiosity what were your accountants reasons?
@@JimmyBob708double taxation; paying corporation tax in the Ltd Company and then personal tax on any monies transferred from the Ltd company to myself.
@@JimmyBob708 double taxation. Firstly corporation tax through the limited company, and then personal tax if you pay yourself from the limited company.
I was always concerned that this was done to protect you in the event that a tenant comes with some type of lawsuit....but is it fair to say the insurance on each property should/could cover a lawsuit?
@@Paulie44I am wondering if higher tax payers would still be better of doing this even with the double taxation.
I’ll help you out….
The best way to do it is hybrid…
Hold property in both your own name and limited company….
And if you are buying in your own name you can avoid tax by continuing refurbs…
What about a foreigner investing in UK properties
What was your question specifically?
Get professional advice.
How about "Never BUY Investment Properties..." because houses are homes, not financial products?
Are you blind to the situation tens of thousands of families are in, because of "investors" like you?
Without investors like them the problem will be even bigger mate.
Ye they are in it for the money but they transform single lets into multiple units for more renters to afford.
In capitalism not everyone can afford to buy.
@@odysseasv7138 You don't think that a significant reason property prices are so high, is because of buy-to-let?
And cramming more people into the same space, has downsides (unless you're a landlord of course).
@@kcnmsepognln of course it has downsides. But we are in an environment of that nature now where there's just not enough houses. It's supply and demand, nothing to do with landlords or home-owners. The situation is as it is because of decisions of the past governments and high population increase.
And keep in mind politicians have inflated these prices(by introducing schemes that SUPPOSELY helping others to step on the ladder and not building enough) more than anyone because their 'friends' are super landlords..
If one hopes that with the reduction of BTL landlords prices would drop, that one to be naïve..