HELP we have 3 personal BTLs with 3 different lenders and want to incorporate?

Reply to the comment left by kher khulpateea at 21/09/2021 - 17:46
Yes, but that does not mean that the company can pay the mortgage payments and claim them as a business expense.

The best advice I can give you is to completely forget the idea of using a limited company as a managing agent.

At best, it might save you a few pounds a year of income tax, but cost you more in increased accountancy fees. At worst, it could damage your ability to incorporate in a tax efficient manner.

Reply to the comment left by kher khulpateea at 21/09/2021 - 17:46
You can lease the property to your company for an amount equal to your mortgage payments if you wish. However, the company will not be able to claim the mortgage payments as an expense, so you will be no better off.

Reply to the comment left by Alex at 21/09/2021 - 11:38"you're probably talking to the call centre staff, who will not be properly equipped to (a) understand your question and (b) know how to answer it."
This disease of the first world that alone will be the end of all of us. For many years now the pretence that you are dealing with a conscious human being capable of sound judgement and acting on it, rather than a biological algorithm, is being increasingly abandoned in every sphere of human activity and these "people" are being increasingly replaced with "Bots" and even worse dysfunctional processes. If you do not fit the processes, you came under the category of "too much trouble".
I intend to get as much distance from this mindless experience as possible.

As I had understood it, a key element of this question is that there are only 3 BTLs in the portfolio and that makes incorporation impractical - or has that assessment changed?

Reply to the comment left by Andrew Wright at 21/09/2021 - 22:57
Nothing has changed. The same rules still apply today as they did for the Ramsay case in 2013 which was based on legislation from 1992.

Mrs Ramsay owned one property split into 10 flats of which five were let. The critical factor that went in her favor was that she committed 20 hours a week to her property investment business. However, the HMRC manuals also say that “other circumstances should be considered carefully”.

Hi thanks for the repays
Ok I'll expand a bit on my situation
We have have me and my girlfriend but whatever setup it is going to be it will be in just her name at the moment.

1) 1-bedroom maisonette
2) 2-bedroom maisonette
3)5 bedroom terraced house that we rent out by the room but at present but don't have no more than 4 people in there to stay under the threshold to be HMO at the moment.

The value of all three of them range between £970,000 to £1,150,000 depending on what evaluation you take from there range on Zoopla with about 45% percent equity in them which we are considering releasing some equity if possible as well we have £200,000 cash available to invest on top of any equity released.

To buy 1 or 2 more properties or if we can find a commercial property that can be turned into to flats within our budget with would be my preference but also is more complicated and don't know if that complicates the set-up of any limited company or corporation.

The properties are in just one person's name and is going to remain that way and she is a higher rate taxpayer from there job.
So obviously section 24 and having to pay tax on all the income without having the mortgage expenses taken off.

As well as looking forward in to the stamp duty capital gains tax and eventually inheritance and the right way to efficiently minimise the tax implications in doing a LTD or AN LLP or whatever is best going forward.

We like the idea of the trust owning the portfolio that our family/daughter at the moment can then loan the funds to herself when she is older without seeing the portfolio disassembled and sold off and not jeopardising the assets with any potential future marriage divorce etc etc
if I understood the video that I watched you in ie Mark at property118 on YouTube.

My main problem has been been trying to educate my girlfriend as her accountant has been telling her the opposite to what I have been trying to say and she trust him or has trust him as h

He's a professional but now I'm getting through to her with the help of the YouTube videos the eBook I've downloaded off this website and general searches on Google I now need to just put forward the right proposal which I'm trying together enough little bits of info to justify to her to pay the £400 for property118 to propose the proper detailed plan

I have a question for Mark hopefully he reads it as it seems like he does are you accountants and potentially could we come to you to manage the accounting side or what services do you offer above the recommendation/consultation/tax planning service.

Thanks again everyone

Hi Lance

We always recommend our Clients to involve their Accountants in the Consultation process.

I have two questions for you at this stage:

1) Are you also a higher rate tax-payer? If not, how much short of £50,000 a year of taxable income are you?

2) How old is your daughter? If she is over 18 then she will also have her own tax allowance, so we would need to know how much her taxable income is and whether she wants to be involved in the business and whether you want her to be involved in the business for business continuity and legacy planning purposes.

Dependent on your answers to the above, an LLP might be the way forwards, but not a mixed LLP, just a family Partnership.

Reply to the comment left by Mark Alexander at 29/09/2021 - 15:01
Hi mark
Thanks for the quick response.
I'm not able to be involved financially at the moment that could change but I don't have a time frame because it's out of my hands and our little girl is 6 years old and I would like her to be involved in the business later on in life but that's a little way off yet lol
So it's just going to be my partner who is able to setup an LLP but I thought it had to be more than one person if I can remember reading it correctly.

Reply to the comment left by Lance Walker at 29/09/2021 - 16:19
Hi Lance

You’re quite right, an LLP does indeed require two Designated Members.

Your Accountant could be the second designated Member. Had you considered appointing a Professional Designated Member?

Why can’t you be a Designated Member and join with a zero value capital account? If is divorce, financial problems etc. that you’re worried about there are workarounds for that.