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    Default Buying residential property under Limited Company

    All,

    Good morning. I have a quick question. We are considering buying a house under limited company name. I need guidance on following.

    1) Is is possible, advisable to buy a house under company name?

    2) Implication of it if we stay in that house? i.e. bok taxes etc

    3) In case of non-contract renewal how do we handle mortguage payment? Can we (directors) take over then?

    4) To cover down payment can company borrow from directors as loan? Does limited company pay intrest on borrowed money?

    Also any other things you think we should consider against buying house on company name.

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    Still gathering requirements...


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    I'm sure somebody more qualified can give you a decent answer, but in the meantime my understanding was that it's generally not very beneficial to buy property through a company unless your business is specifically the trading of properties (buy-to-sell). If you're just doing this for your main residential property I doubt it would be worthwhile unless there are other circumstances you haven't mentioned.

    Also, for one thing, I think you'll have a hard time getting anyone to lend to your company.

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    Default

    Quote Originally Posted by mehtasa View Post
    All,

    Good morning. I have a quick question. We are considering buying a house under limited company name. I need guidance on following.

    1) Is is possible, advisable to buy a house under company name?

    2) Implication of it if we stay in that house? i.e. bok taxes etc

    3) In case of non-contract renewal how do we handle mortguage payment? Can we (directors) take over then?

    4) To cover down payment can company borrow from directors as loan? Does limited company pay intrest on borrowed money?

    Also any other things you think we should consider against buying house on company name.

    You just got to admire the audacity of some people, dontcha?

    If the ltd co buys a house, the house belongs to the ltd co, not you.

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    Default

    Quote Originally Posted by BolshieBastard View Post
    You just got to admire the audacity of some people, dontcha?

    If the ltd co buys a house, the house belongs to the ltd co, not you.
    Indeed, plus if the Ltd goes bust then the house is a very material asset to be liquidated.

    Mortgages could be an interesting challenge as a Ltd for a residential not commercial property.
    They're going over there to get their awards. Three different words that sound similar, but have their own unique meanings; they're NOT interchangable no matter how lazy you are.

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    Default

    Quote Originally Posted by mehtasa View Post
    All,

    Good morning. I have a quick question. We are considering buying a house under limited company name. I need guidance on following.

    1) Is is possible, advisable to buy a house under company name?

    2) Implication of it if we stay in that house? i.e. bok taxes etc

    3) In case of non-contract renewal how do we handle mortguage payment? Can we (directors) take over then?

    4) To cover down payment can company borrow from directors as loan? Does limited company pay intrest on borrowed money?

    Also any other things you think we should consider against buying house on company name.
    Everything you say is entirely doable. Whether it is prudent is another matter. There can be circumstnaces in which it is beneficial; but in my view it's unusual.

    It's has been discussed manner times before, a search may prove beneficial.

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    Default

    Thank you all for your answers.

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    Contractor Among Contractors

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    I run a buy to let property business as well as being an IT contractor. Its not worth buying a property through the company unless its something like a BTL or a proper commercial premises. You still have to pay CGT if you liquidate it etc etc...Its also a lot more difficult to get a mortgage for a commercial property and they aint cheap..!

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    Quote Originally Posted by mehtasa View Post
    All,

    Good morning. I have a quick question. We are considering buying a house under limited company name. I need guidance on following.

    1) Is is possible, advisable to buy a house under company name?

    2) Implication of it if we stay in that house? i.e. bok taxes etc

    3) In case of non-contract renewal how do we handle mortguage payment? Can we (directors) take over then?

    4) To cover down payment can company borrow from directors as loan? Does limited company pay intrest on borrowed money?

    Also any other things you think we should consider against buying house on company name.
    Possible yes, advisable no.

    HTH

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    What is the business of the the company? If the company owns a property its expenses could be deductible as companies expenses subject to the condition that expenses are incurred wholly and exclusively for the purpose of the companies business. In your case when you are using the property for your residential purpose, Mortgage interest does not seem to be for the purpose of business of the company hence will not be deductible. However if you being the director is also working from home or have made one room in the house as office in that case mortgage interest and other home expenses will be proportionately deductible.

    Hope this helps.

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    Quote Originally Posted by mehtasa View Post
    All,

    Good morning. I have a quick question. We are considering buying a house under limited company name. I need guidance on following.

    2) Implication of it if we stay in that house? i.e. bok taxes etc
    You will be assessed for the rental value of the property as a BiK (unless you actually pay that rent to the company)

    And, no I am not joking.

    tim

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