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Put Property into Limited Company or a Trust

Trust or Limited Company

  • Limited Company

    Votes: 3 75.0%
  • Trust

    Votes: 1 25.0%

  • Total voters
    4
I

Indy

New Member
Hi
I was looking to put a few residential properties into a Limited Company - apparently this is more tax efficient – assuming it worth while Capital Gains consequences.

However, I have also seen some people put property into a Trust. Is it more beneficial to create a Trust or a Limited Company?

Many thanks in advance

IG
 
D

diyhelp

Active Member
I am aware of the process and the benefits of transferring your property into a company but not so much with regards to a trust. There are benefits in transferring to a company; one which brings to mind is mortgage interest relief which has been phased out for individuals. Under a company umbrella I am led to believe you can still offset the cost of loans against income for the company.
 
L

Longterminvestor

Administrator
As well as the various issues benefits surrounding taxes, etc dont forget the other major benefit. If you have a property portfolio and you are looking to sell it all, you dont need to do paperwork for each property. Each property is owned by the company so selling company shares to the buyer will save a fortune on solicitors fees, etc.
 
P

PostBrexitInvestor

Member
Limited company all the way for me - I often think trusts will become a target for left wing leaning politicians in the future.
 
L

Longterminvestor

Administrator
Any wealthy individuals will become a target for left wing policies of the future - not just the trust children.
 
D

diyhelp

Active Member
At some point we will see a socialist government in the UK which is when they will target property owners.
 
L

lookinginvest

Member
In the short term it is a numbers things, in the longer term it will be more political than anything else.
 
M

marksaref

New Member
Advantages and Disadvantages of Trust

Advantages
  • More options for income distribution
  • More options for income distribution
  • Operate the business with more privacy
  • Can be advantageous for minimizing tax
Disadvantages
  • More expensive
  • Complex to dissolve
  • More complex
  • Difficulty with borrowing funds

Advantages and Disadvantages of Company

Advantages
  • Tax benefits
  • Limited liability
  • Ability to transfer and sell shares
  • Business can own property in its name

Disadvantages
  • Expensive reporting fees
  • Reporting requirements on company directors, managers, etc
  • Manage of company subject to shareholders
Now you can take your decision easily.
 
N

NicolaQeen

New Member
In these two cases, you need to have reliable people in your company.
 
K

Keith85

New Member
Hi
I was looking to put a few residential properties into a Limited Company - apparently, this is more tax efficient – assuming it worth while Capital Gains consequences.

However, I have also seen some people put property into a Trust. Is it more beneficial to create a Trust or a Limited Company?

Many thanks in advance

IG
I guess before you consider either option, tax consideration could be your utmost consideration. For instance, consider paying stamp duty land tax (SDLT) on the purchase price when buying a home in England or Northern Ireland, in my opinion. To be on the safe side, I'd recommend staying away from the property market in Scotland and Wales. However, in the past, SDLT was a simple process for the majority of home buyers. A property purchase can now be highly complicated due to the large number of rates that may be applicable based on your specific circumstances and the structure being used. The bottom line is that whatever option you choose, the result can significantly impact the price of purchasing a home due to taxes.
 
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