LTD Company Mortgages
Limited Company mortgages are also available to some investors, and these types of mortgages are sometimes beneficial for business people. Holding a property under a limited company can sometimes offer tax benefits particularly to those in the higher rate of tax.
This is because the tax is paid on the income generated from rent. If you own buy to let property in your name, the rental income that you receive accumulates as taxable income. The rental income that you receive combined with your other income will determine the tax band that you fall into. Rental income can sometimes push you into a higher tax band which can mean that you pay more tax.
When a rental property is held in a limited company, they are not treated as personal income and are not taxed as such. The tax rates are charged as Corporation Tax which is currently 19%, and there aren’t any upper tax tiers like there are for income tax.
If you are considering moving a buy to let property into a limited company, it is always advised that you seek advice from a qualified accountant who can help you navigate the complexities of tax.
Buy to let is a complex and challenging investment that requires a careful approach from someone who is experienced in the industry. Some of the questions that you will need to consider include:
- The amount of rental income that is required
- Whether you need to own a residential property
- How much you can borrow
- If you should purchase under a limited company
- What deposit will you need
Speaking with a professional finance specialist in buy to let will be able to guide you through the complex landscape and allow you to find the ideal property and structure your finances in the right way.
