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Where Taxpayers and Advisers Meet

Restructuring as a company

paulstafford
Posts:4
Joined:Fri Apr 13, 2018 8:43 am
Restructuring as a company

Postby paulstafford » Sat Apr 21, 2018 10:48 am

Hello

I am giving increasing thought to restructuring my portfolio (owned privately between my wife and I) to a limited company.

Seemingly to me the major barriers to this are that you must have the capital to initially facilitate the purchases by the company and that there will be capital gains to pay from the sale as an individual.

This aside, the tax savings are attractive and there is potential for me to grow my portfolio further by taking advantage of the fact interest is a deductible expense for a limited company.

Please could you share your thoughts... have I grasped the basics correctly in my statements above and is there anything obvious I have not considered?

Cheers
Paul

AdamS93
Posts:268
Joined:Tue Sep 26, 2017 6:28 pm

Re: Restructuring as a company

Postby AdamS93 » Sat Apr 21, 2018 2:13 pm

You will have to crunch the numbers. Everyone's situation will be different.

You will also need to consider Stamp Duty Land Tax and the willingness of the mortgage providers transferring the liability to the company.

Generally, it is only worth it if you have a highly geared portfolio and you want to retain the cash within the company.

It is hard to advise on this, as if Labour get into government next, I would imagine that there will be further tax issues from renting residential properties. There is nothing stopping the government restricting mortgage interest for a company in relation to residential property lets in the future, of which I am thinking will become more and more likely as the number of BTL landlords that are incorporating is increasing dramatically. If this were the case, you haven't achieved a lot going down the limited company route.

You need a crystal ball unfortunately. I am no financial adviser, but it may be worth keeping all options on the table and not putting all your eggs into the BTL market - think about pensions, commercial property and shares etc as all are far more tax efficient than residential properties (at the moment anyway), it is just 'sexier' to have a BTL.


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