Limited Company BTL’s

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July 26, 2021

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Is purchasing under a Limited Company right for you?

The decision on whether to purchase a Buy to Let in your personal name or in a Limited Company can be a difficult one, but one that you need to make sure is the right one for your personal sitution. Our best advice is to speak to an accountant but we thought we would provide you with a couple of things to consider to start off with:

  • Mortgage Interest Rates – interest rates are higher on Limited Company mortgages than on standard Buy to Let mortgages

  • Corporation tax – Limited Company landlords pay corporation tax, as opposed to income tax, on the rental income.

  • Tax Relief – Finance costs, including mortgages, remain tax deductable for Limited Company landlords

  • Stamp Duty – The same level of Stamp Duty Land Tax is paid whether you are purchsing under a Limited Company or in your personal name.

  • Profit Extraction – The way rental income can be extracted can make difference on the profit made. We have drawn up a table below which includes a worked example.

  • Transfer of Property – if you are purchasing a propety in a Limited Company from yourself, the Limited Company may have to pay Stamp Duty Land Tax and you as the individual may have to pay Capital Gains Tax.

  • Number of properties – if you are looking to buy a large portfolio of properties or looking to buy just one single Buy to Let this will affect whether you should buy within a Limited Company or your personal name.

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