Asset transfer to Ltd company

[Adrian R]

I have a couple of residential properties owned outright and another mortgaged (200k),All in my name

I would like to start a Ltd company with myself and my two daughters as share holders, then transfer the properties into the Ltd company.

I have not got this further than an idea, so all constructive advice is welcomed.

Best regards
Adrian

 

[diyhelp]

I am not aware of the mechanics of how to do this but 2 early points to make:-

All asset transfers to a company must be at the prevailing market price - backed up by a valuation from an unconnected third party.

It is not as easy to get a mortgage for a company as it is for an individual.

 

[Longterminvestor]

I believe not all mortgage companies will accommodate limited company mortgages - whether this means rates are higher than in the personal mortgage market (due to less competition),I am not sure. Any know if this is right?

 

[lookinginvest]

Just wondering about the average difference between personal mortgage rates and business mortgage rates. Does anyone know?

 

[Longterminvestor]

That is quite a big difference in terms of headline interest rate even if base rates are at historic lows. Is the difference purely and simply because of the added risk of lending to a company - the fact it is a legal entity in its own right and if it went bust then any debts might not be recovered (I appreciate some debts might be covered by a call on assets and personal guarantees by directors).

 

[realdeals]

Are there not better ways for companies to fund property acquisitions/developments?

 

[Longterminvestor]

Much like we have seen in the private investor BTL market recently where headline interest rates have fallen? If your assumption is correct then eventually the traditional banks will place more focus on the limited company BTL market, more competition should see rates fall?