Using a Ltd Co for Buying New Property and managing existing ones
I have large Portfolio of property in the NE and I am looking at a number of avenues to avoid this tax regime from the summer budget.![]()
I have no income other than from property, have a very good cashflow and pay high rate tax now,
Yes I could move half of my BTLs to a LTD Co with little CGT or Stamp Duty to pay as half of my BTLs have been purchased since 2008 and there has been little Capital growth since then in the NE.
Even if this new evil tax had not come around the corner I would have thought of using a LTD co for future purchases. This would give me the option to bring my family into the Ltd Co via Shares Wife ,Son and Grandchildren.
Now I need to inflate my expenses on Management and Repairs to reduce the Taxable cash in my BTL business. My plan is to use my Co to do all the repairs for my BTLs
so lets say I have a repair cost on BTL of £100.00 my Ltd Co would do the repair with the help of a tradesman charge of say 25%. My BTL would then have an invoice for £125.00
The effect would be a larger Repair Bill for my BTL and My Ltd Co would have a profit of £25.00.
As I am 57 pensions would be a good choice for My LTD Co to fund my pension etc which is tax efficient.
Is this sort of arrangement legal and do others see any problems with the arrangement
Regards
DL
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Member Since January 2011 - Comments: 12212 - Articles: 1417
11:41 PM, 2nd October 2015, About 11 years ago
Reply to the comment left by “Steve Ford” at “02/10/2015 – 23:38“:
I will respond fully tomorrow Steve but all of your assumptions are wrong and your ideas are not workable. I will provide links to legislation to confirm.
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Member Since April 2015 - Comments: 4
11:44 PM, 2nd October 2015, About 11 years ago
Reply to the comment left by “haf ali” at “02/10/2015 – 16:19“:
Some lender out there will not lend on new start business, however there are some lenders out there will lend secured against the property and release equity. Speak to your bank manager and build raport. There are a few commercial lenders out there with flexible approach I am happy to point you in the right direction.
Member Since January 2011 - Comments: 12212 - Articles: 1417
8:46 AM, 3rd October 2015, About 11 years ago
Reply to the comment left by “Steve Ford” at “02/10/2015 – 23:44“:
Steve
With respect you are looking at the problem from the perspective of a commercial finance broker. This might work for very low LTV commercial deals but it will not work for residential investment portfolios.
First you wouldn’t get s162 incorporation relief for an offshore company. Second, you wouldn’t get a waiver on the 20% withholding tax on rents. This is not VAT, look up “withholding tax on UK rents” in Google.
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