Hi there,
My husband and I are about to purchase an investment property which we would like to run as a holiday let.
We have borrowed against our main residence to fund the purchase and will have no mortgage on the new property.
We are both higher rate taxpayers.
We are considering our options with regards to whom should buy the property
1- we could buy as individuals
2- we could lend the money borrowed to our ltd company of which we are both shareholders and get the company to buy the property.
As far as I can tell option 2 would make better financial sense as we would not be eligible for any mortgage interest relief as individuals (the mortgage is secured against our main residence) but lending the money to the ltd company would enable us to claim tax relief as a "Qualifying loan interest". Is this a correct assumption?
At the point of disposing of the property, what would be the tax implications if the company is purchased through the company?
I understand as an individual we would be eligible for some CGT tax allowance but this does not apply to companies.
Thank you in advance.
Sarah
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