What is a ltd company buy-to-let?

A limited company buy-to-let mortgage is a loan from a lender to your limited company. This means that the company will own the property. If you incorporate your buy-to-let business as a limited company, you won’t pay income tax on the profits, you’ll pay corporation tax instead which is lower (currently 19 – 25 % depending on profits). This should significantly offset the halving of tax relief for higher band taxpayers.

Benefits of a ltd company buy-to-let

Tax: Can be seen as more tax efficient than personal income, especially for higher rate or additional earners.

Limited liability: If the company dissolves it is not forced to sell other personal assets.

Increased potential borrowing: Other lenders for new personal mortgages may not take these into account as commitments and therefore may allow increased personal borrowing.

Multiple shareholders on title deeds: Can make it easier to manage proportions of ownership and share of profits etc.

At Financial Fortress, we have the knowledge and experience to help landlords that have multiple properties or those just starting out.  Your adviser will clearly explain all the costs, risks and benefits of all routes ensuring you make an informed decision including the taxation implications.  We will scour the whole of market, taking account of each providers lending policy to bring you the very best deal. If you need an accountant or need help forming your company, we will work with your own experts or recommend local and reputable firms if required.

Most loans made for properties that a person never has, nor plans to reside in are generally unregulated by the Financial Conduct Authority (FCA).  Meaning that if something goes wrong the borrower would have less protection as the loan was not subject to the stringent FCA rules.  Whilst we publish this guidance for information care should be taken to understand the regulatory status of any lending entered into.