Limited company structure - is it for you?

[totallyproperty]

Afternoon all.

I've seen quite a lot of social content recently discussing what is the right business set up for property investors, landlords and developers.

I wondered how many of you recommend/use a Limited Company set up (from the beginning) or if you think it's only portfolio landlords or bigger developers that really benefit from a Limited Company structure?

Interested to hear your thoughts.

 

[Longterminvestor]

This is a very interesting discussion!

It is a simple process of weighing up the costs and benefits of a limited company against owning property yourself. The ongoing reduction in mortgage interest relief (which will hit higher tax payers) is a problem for many investors. If the property was held in a limited company then it would simply be a case of offsetting all costs associated with the business (mortgage/loan interest in full) against rental income. You also need to take into account the higher costs of administering a company (company accounts, etc) compared to own name investments.

One issue which many people fail to recognise is the potential savings when selling a property portfolio. If all of the investments were held individually in your name then you would have numerous costs (for each property) replicated when transferring to a buyer. If held in a limited company the limited company would still own the properties but you would simply sell your shares and transfer ownership of the company to the buyer. No need to re-register individual property ownership,