Differences of opinion – What do you think?Make Text Bigger
In the embedded video below there are a few answers given by the presenters (Mark Smith and Andrew Roberts) that I disagree with.
The first is in regards to the pricing of Limited Company Buy-to-Let mortgages vs individual Buy-to-let mortgages.
Whilst I agree that at face value there is a difference, in my experience, those lenders offering cheaper rates do not do so for Portfolio Landlords. Furthermore, lenders who do lend to Portfolio Landlords are pricing their products very similarly for both individuals and Limited Companies. However, there two major differences, and they are:-
- Ltd Company borrowing is much easier to arrange than ever before (more availability)
- maximum loan based on rental income are far more generous for Limited Company applications, because Section 24 taxation does not need to be factored into affordability and stress testing
What are your thoughts on the above? Please comment below.
The second answer I disagree with is the generic response to the question about whether to remortagge before of after incorporation. I don’t think there can be a ‘one-size-fits-all’ answer to this question, because there are several factors to be taken into consideration, such as:-
- Is there a ‘latent gain’ position? – Explanation HERE
- What is the new debt to be used for, i.e. reinvestment in the business or personal use?
- Is there an opportunity for a Capital Account Restructure? – Explanation HERE
To be fair to the Presenters, I know from experience that it isn’t always easy to answer questions from the floor when you have a large audience and a camera in your face. Likewise, Tax Barristers rarely put themselves into this position and always like to consider formal advice to their clients very carefully indeed. Presentations of this nature should never be considered to be formal advice.
I have discussed these thoughts with both Mark Smith Andrew Roberts and we are very much ‘on the same page’, but what do you think about these points, particularly the financing angle?
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