New EICR to cover any changes made by outgoing tenant?10:00 AM, 4th May 2021
About 2 weeks ago 95
Hello, I have a question re Section 24 BTL on personal vs Ltd Co. Having been a landlord for nearly 10 years now, I understand the practical tax issues that come with section 24 changes and I completely agree with Mark & Mark’s smart company structure in the long term. This would also imply that any future BTL investments (buy to rent and hold rather than development) be made in a LTD company.
However, facing a situation at the moment, I am wondering if it’s always advantageous to go Ltd co route. If I am buying a say £400k property at 75% LTV, implying a £300k mortgage. BTL co rate would be approximately 4% pa but personal BTL rate would be 2% and be about £2k cheaper to secure the mortgage.
Taking into account even the highest rate band mortgage relief “lost” under s24 would still mean that the personal mortgage is far cheaper.
I get that going the Ltd co route also opens up other benefits such as CGT and IHT planning but if a landlord has a relatively small portfolio of <10 properties, is already a highest rate taxpayer and mortgage rates are super cheap, there must be a tipping point where the Ltd co is not always the best answer. If I were to purchase in a personal name, then what stops us going down the Mark @ Cotswold strategy down the track when the mortgage rates are more favourable (or the properties are mortgage-free) of switching into a Ltd co?
Am I missing something in my maths in the example presented?
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