Property Investment through Ltd

[Lockhouse]

Very true, why not make the offshore company a shareholder.....create another level of shares within the company (e.g. Ordinary B Shares) and extract the funds by sending dividends to the offshore company.

Superb.

[glashIFA@Paramount]

I've got a property through my Ltd.

There are just as many "cons" as there are "pros". Your mortgage will be more expensive, you don't have as much flexibility as if you owned it personally, you are at the mercy of changes in corporate legislation, you will always have conversion to cash issues (tax or otherwise) when you sell. There are different issues for inheritance, law, buying abroad etc etc. It's not as simple as you have been led to believe. Watch out.

Absolutely right and be really careful about the Inheritance Tax issue especially. There is no double taxation agreement between the UK and places like Spain so if you pay IHT on worldwide assets in this country your estate could also be liable for additional tax there too.

[ASB]

Another issue to be careful of if the property is owned by a company is the companys residence. If the company should cease to be UK resident then the government usdually want a nice big chunk of corporation tax. It's called the exit charge and essentially is levied on the value of the retained assets.

There are also issues with overseas property in the destination country. A few years ago Portugal introduced some new tax charges for properties that were owned by non portuguese resident companys. These could lead to fairly swinging tax charges.

Tax cafe do a guide on ownership through companies. I think it costs 25 quid. Probably money well spent. It may be that ownership through a corporate structure suits your purposes, it will tend to be finely balanced.

[Jog On]

I read on another post here about buying shares through your Ltd making you an 'investment company' and putting you into the higher CT bracket regardless of size.

Is that true? If so does that go for property as well?

[DaveP]

I do a bit of buy to let stuff just in the UK.

I dont know the ins & outs of it, but was advised by a boffin at manager.co.uk

to keep all property stuff seperate (personel) as generally it involves big chunks of money (purchase price, rental income etc etc) which will potentially be liable for corporation tax.

hope that helps

Has anyone done or currently doing this? Went to the A Place in the sun exhibition at the weekend and am looking for a BTL either in the UK or abroad. Now, thinking about the money situation..I live on a minimal wage each month and save up tons in my company bank account which I grab when I need. So I might aswell use the ltd to fund stuff right??(if I can)

Some pimps(sun tanned estate agents same as recruitment agents) on the stands talked about using a ltd company to invest through rather than personal income when buying an investment property...not applicable for inheritance tax etc and if you sell & make a profit - first 10k is tax free

Is this right? I will of course speak to my accountant about this, but wondered if anyone is already doing it.

[Mickmanus]

Very true, why not make the offshore company a shareholder.....create another level of shares within the company (e.g. Ordinary B Shares) and extract the funds by sending dividends to the offshore company.

Can you hold UK property offshore, if you are a resident in the Uk?

[DaveP]

Btl

Unsure about that but I like the idea, as a starting point speek to people at
www.themoneycentre.co.uk they generally know there stuff, I used them to get my first BTL mortgage.

[Darren@UptonAccountants]

Can you hold UK property offshore, if you are a resident in the Uk?

Yes, but through an offshore company. In effect, the offshore company has ownership of the property, you just hold shares in the offshore company.

[Mickmanus]

Yes, but through an offshore company. In effect, the offshore company has ownership of the property, you just hold shares in the offshore company.

Where would the rental income from the property incur tax; here in the UK or offshore?

[ASB]

Where would the rental income from the property incur tax; here in the UK or offshore?

Potentially both.

In any event if the landlord in non resident then basic rate tax should normally be deducted by a letting agent http://www.hmrc.gov.uk/cnr/nr_landlords.htm

If no letting is used then it's normally down to the tenant (if they are aware of their obligations).

Of course anything deducted under the non resident scheme is just effectively a payment on account.