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Forming a limited company to rent out properties?

Started by Taiga, October 29, 2019, 04:37:57 PM

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Taiga

Hi,

I currently rent out 4 houses and have been doing so for 7 years or so.  I just wondered if it would be in my interest to form a Ltd company to rent out these houses.  I  would like to know the pros & cons of this, if anyone can give me any info on this ( I don't need a comprehensive overview, just an outline).  Thank you for your time.

FYI : These are all 3 bed houses rented to families.

heavykarma

A lot depends on your financial circumstances.I did raise this question years ago with my accountant,and he could see no benefit to be had in setting up a company.That advice might be different now of course.

Simon Pambin

Arguably the big change is that a company would still be able to claim tax relief on all its mortgage interest, whereas it's increasingly restricted for individuals. Whether that would be enough to offset the costs of setting up and running a company, four lots of stamp duty and the difficulty of finding a mortgage lender who's prepared to lend to a corporate minnow at a reasonable rate is another matter.

Hippogriff

It's the SDLT that dissuades the proactive transfer, I think... it likely requires financial modeling to specific financial circumstances - you won't get a generic "yes" or "no" from here. You've given us nothing to go on... we don't know if they're wholly owned, on repayment mortgages coming to about half way, or on interest only... you need to think more for yourself or share more pertinent - and more - information. Or... just lay the problem at the foot of an Accountant, who will need to ask you questions, paying for the privilege.

Then let us know the outcome.

Do you intend to grow?

eps501

I've been down this road a couple of years ago and there was no benefit for me in my circumstances. I think the short answer is No mainly because you already have the properties. An accountant with expertise in Landlord accounts should have some basic answers for you.