BTL Ltd Company - Children investing alongside parent

[Coops031]

I am looking at buying a flat to rent. My children (all under 18) have savings gifted to them some time ago by my now deceased father. I am considering whether to buy the flat in a limited company and issue shares to the children for investing part of their savings in the flat to diversify their investments. My understanding is that each child would be liable for tax on their dividends. However, am I missing any unintended tax consequences that make this a bad idea?

[AGoodman]

The only obvious one is that you will all suffer double taxation if the children want/need their money bank for e.g. buying a property of their own. The company pays CT on profits and then the shareholders pay CGT on a liquidation to extract the monies: the total could be 43% on the capital gain vs 24% for personal ownership.

When you take into account the higher rate of SDLT to buy a property, you should only really consider a company if you are planning to hold in the long term.