Letting and Family?

by Readers Question

11:13 AM, 11th June 2018
About 2 years ago

Letting and Family?

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Letting and Family?

We are investigating our first potential property investment as a way of helping out a close family member, and ourselves as a long term investment. We are higher rate tax earners so have looked at buying and getting a mortgage through a limited company.

Would it be permissible to let the property to a family member of a director of the limited company?

Would the family member be able to gift the deposit for the property to the company (whether he then lived in it or not)? He would not be in any way part of the company.

What kind of professional should I seek to give me the best advice about this fairly complicated situation!!?

Many thanks


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Neil Patterson

11:17 AM, 11th June 2018
About 2 years ago

Hi Jenna,

The exact relationship of the 'close' family member is an important BTL consideration under FCA regulations.

It becomes a 'consumer' loan if the close family member is vertically parents, grandparents, children or grandchildren. Then horizontally brothers and sisters.

Joe Gervin

12:43 PM, 11th June 2018
About 2 years ago

I would think your financial advisor needs to look at these circumstances. Can you afford to buy the property outright in the NewCo? If so, you would have no issues re CML handbook / FCA etc. In the circumstances above the lender will ask where the deposit is coming from? I dont see any reason why the LTD couldnt taken a "loan" or a gifted deposit as long as the paperwork was right (approved by solicitor / accountant). Thereafter, the lender if happy, should be able to loan the collateral. The "tenant / occupier" status is a further query for the lender.
Joe Gervin
Liverpool Property Solutions

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