Shelter’s Income and expenditure figures highlighted13:57 PM, 4th February 2019
About 3 weeks ago 35
For my main job (nothing to do with property) I work through my own limited company, taking around £8k in wages per year and £30k in dividends. This is just enough to keep me out of the higher tax bracket. Over a few years this has left me with enough money sitting in my company’s bank account to fund a 25-30% deposit for a BTL (purchase price around £110k-120k).
I will, however, lose 25% of this deposit to income tax if I just take the money out of my company for myself, with a view to getting a regular high-street BTL mortgage. Therefore I wondered if in this case it would make more sense to buy the BTL through my limited company? I’ve never had a business loan or mortgage before so am a bit green as to the logistics.
Could I then sell the house back to myself using a high-street BTL mortgage, in say 6-12 months time, before it attracts too much CGT (for which I believe there is no relief for limited companies)? Or would that be seen as some sort of tax dodge by the tax man? Would high-street lenders be happy with this arrangement? Would it be worth all the hassle?
Additionally, if I wanted to improve the property in a way which will make it worth more, e.g. add a loft extension, would it be more beneficial to do the works when my company owns it or when I own it, in regards to the CGT I’d be liable for when I finally sell it? (5-10 years time at least.)
BTW I am not married and have no children to share any CGT relief with.
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