I have got several rental properties in my own name and I think if I buy any more it should be as a Ltd company since I have just about maxed out my tax mitigation options as an individual. My own home is unencumbered. When borrowing is cheap I tend to think this is a bit of a wasted opportunity.
My idea is a personal residential mortgage with a corresponding Director's loan to transfer funds to a Ltd company to buy a property i.e.
I borrow against my PPR
I lend the released equity to my Ltd. via a Director's loan
The Ltd pays me interest at the same rate as the bank charges me
My personal taxable income from this should be zero. Mortgage interest would be tax deductible since it is for business purposes.
This would seem (on the face of it) preferable to the Ltd. company taking out the mortgage, since deals are better for individual homeowners than for companies. Would this work / make sense?
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