Residential to Ltd co for capital raising?

Residential to Ltd co for capital raising?

13:47 PM, 1st February 2021, About 3 years ago 5

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I have a 10 property BTL portfolio in a Ltd Company. I want to expand, but my lender option is compromised by their current policies.

My own home is unencumbered, but I’m being rejected for finance on that because “my income is from property”. I am happy to transfer/sell/ or give my property to the Ltd Company in an effort to raise funds to expand the portfolio

Any comments or advice would be welcomed.


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Katy Ann

19:48 PM, 1st February 2021, About 3 years ago

SDLT payable by company if it buys the property from you.
Possible IHT gift with reservation of benefit issues if you gift the property to the company.
Possible benefit in kind income tax charge on you as director if you don’t pay the company a commercial rent for your occupation.
Possible Annual Tax on Enveloped Dwellings tax charge on company, depending on value of the property.
No CapitalGains tax principal private residence relief available for the company if you should ever want to sell the house.
When you say you’re happy to gift or sell the house to your company, is that based on you having considered all of the above and decided that none of it's a problem for you?

Mervin SX

20:15 PM, 1st February 2021, About 3 years ago


If you speak to a good mortgage advisor, they will be able to find you a lender who can do what you want to do - i.e. sell your sole named properties into a limited company and release equity (without having a main employment income).

I have done a few transactions in this manner using lenders such as Precise Mortgages & LendInvest.

Of course, the purchase within a limited company will trigger stamp duty charges, etc.


23:37 PM, 1st February 2021, About 3 years ago

You want to look at how you finance these properties and look at commercial / portfolio finance instead of BTL mortgages.
I am sure there are several people that specialise in this on here that would be able to assist.
I think giving up the rights and all the advantages etc of your main residence is the last thing you should do and will cause problems down the line as you will be a tenant and not a house owner, so lenders would look less favourably as most Ltd BTL require a guarantor, if you have no main residence what do you have to guarantee the Ltd company as a director.

John Constant

8:39 AM, 2nd February 2021, About 3 years ago

not all lenders have this policy where they don't accept income from a BTL portfolio towards a residential remortgage. Some are more enlightened than others.
Of course, this is all subject to other personal factors too. A good specialist BTL broker will know who to approach to enable you to release equity from your current residential property, where it can be used to fund a business, using your BTL income.
It is the kind of enquiry we at HD Consultants have successfully completed on many occasions. Feel free to contact me for a chat on 07751 042485.


14:49 PM, 19th June 2021, About 3 years ago

Before you go down his route have you worked with an independent financial advisor to understand your gap in income and assets vs your objectives and the tax implications of investing in property?

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