Getting the right help and advise is vital to ensuring you will make a good return on your investment. We can compare every finance solution available to you and advise you which would be the most tax efficient strategy for you. Plus we will complete a cost benefit analyses to insure it is in your financial best interests whether a Consumer Buy to Let or using a Buy to Let Property Special Purpose Vehicle – SPV
A special purpose vehicle (SPV) is a limited company with a legal status that allows it to hold property. Many landlords are now considering purchasing rental property via an SPV limited company because it could become more tax efficient.
Tax changes: mean that the amount of income tax relief landlords can get on residential property finance costs will be restricted to the basic rate of tax. Finance costs will no longer be taken into account to work out taxable property profits.
Limited Company Buy to Let – Advantages the Tax benefit of a Limited Company allows full tax relief on mortgages interest and to retain profits. The rate of Corporation Tax is currently 18% which means your tax liability is reduced compared to if you are paying income tax as a higher rate tax payer at 40%. With funds being able to be retained in the limited company you can control how much income is taken personally therefore reduce your potential income tax liability.
As a limited company there is No tax on dividends up to £2,000 for individuals. This means you can potentially receive tax free dividend income from your investment properties.
Thing to consider when deciding if a personal Buy to Let versus a Commercial Buy to Let Special Purpose Vehicle – SPV.
With a Property Special Purpose Vehicle – SPV there is No Capital Gains Tax (CGT) allowance when the company sells a property. Whereas individuals selling a property would have.
There is reduced Lender Choice, many lenders happy to lend for Buy to Let in your personal names, many of those lenders currently do not offer Limited Company Buy to Let Mortgages. With the budget changes more are entering the market which leads to a diversified choice and criteria.
Need independent advice to weigh up the advantages and disadvantages can simply contact us to talk through you options, call our team of expert advisers today
Tax information is believed to be correct at the time of publishing. Note most buy-to-let mortgages are not regulated by the FCA.