BTL purchase inside a new LLP?

BTL purchase inside a new LLP?

15:04 PM, 4th October 2021, About 3 years ago 4

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Hi, I am looking to purchase a new Buy to Let investment property. However, I would like to make the purchase of the property inside a newly created Limited Liability Partnership (LLP)  i.e. I am not transferring an existing property to the LLP.

What does everyone recommend as the easiest way to do this?

Do I need a limited company mortgage, or will a personal Buy to Let mortgage suffice?

Many thanks

Vin


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Mark Alexander - Founder of Property118

15:27 PM, 4th October 2021, About 3 years ago

May I ask why you are looking at an LLP as opposed to a Limited Company in this scenario?

The answer to your question is that you could buy the property in your personal name and conduct the business of letting through the LLP, but I do not understand why you would want to do that, save for limited liability status. LLP's are tax-transparent, which means the Members of the LLP are taxed on their profit allocated to them at their personal marginal tax rates. The restrictions on finance cost relief also continues to apply.

Unless I am missing something, you might well be far better off buying in a 'Smart Property Company' structure and dealing with your inheritance tax planning at the same time.

See https://www.property118.com/tax/smart-property-company-structures/

EvolutionBlogger

16:29 PM, 4th October 2021, About 3 years ago

I already have a limited company. I would like to set up an LLP, to enable me to allocate profits in unequal propotions between the partners.

I would like a diverse set of structures, to allow maximum flexibility for the future.

FYI. This would be an LLP between myself and my wife. No dodgy hybrid structures!

Mark Alexander - Founder of Property118

16:39 PM, 4th October 2021, About 3 years ago

Reply to the comment left by EvolutionBlogger at 04/10/2021 - 16:29
You can do all of that and a lot more with a SmartCo conversation of your existing Limited Company.

Please book a Tax Planning Consultation to progress this discussion.

David

17:56 PM, 4th October 2021, About 3 years ago

I thought that the Lesstax4...... model was to own the properties individually in the hybrid model. However, as said in other recent posts, HMRC are onto this as a potential tax avoidance measure.

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