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House Buying Sanity Check
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Originally posted by mgrover View PostFinally, when I sell the house back to myself, I don't plan on making any profit? ie it'll just be the same price. so it should balance out fine that way. Or a bit more given the mortgage payments but nothing crazy.
Not adding any asset appreciation when selling back to yourself is very likely fraud. Why not sell it back to yourself at a loss, then offset this against future gains...Comment
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Originally posted by TheGreenBastard View Post
Not adding any asset appreciation when selling back to yourself is very likely fraud. Why not sell it back to yourself at a loss, then offset this against future gains...
The only sane option for the OP is if you plan to live in the property to buy it personally.Last edited by eek; 14 August 2023, 17:17.merely at clientco for the entertainmentComment
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Originally posted by TheGreenBastard View Post
I think there's a few issues with your plan, some around financial efficiency, i.e. if it's a private residency intended for yourself at some point it will be cheaper and easier to financing in your name - servicing the debt will be cheaper, there are a broader selection of mortgage products, selling your primary residence wouldn't incur tax if moving.
Not adding any asset appreciation when selling back to yourself is very likely fraud. Why not sell it back to yourself at a loss, then offset this against future gains...
But realistically as I'll repeat again, it's purely more so I can afford the property now without stretching myself to breaking out.
On the appreciation, I mean given the current market I can only assume the property would depreciate?
That's what I meant by my comment, I basically mean I'll treat it as I should when selling back to myself.
Anyways this particular strategy won't work due to my SIC code.Comment
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Mortgage lenders tend not to like a deposit being taken as any form of a loan including a directors loan. As part of anti money laundering criteria, you may need to evidence your source of deposit showing the build up of funds over say 3 months.
Your accountant will be best placed to advise but when I evidence my clients source of funds (based on them trading through their ltd co rather than an umbrella), I tend to do so via the ltd co bank accounts. That way, if the purchase falls through, you will not have taken out dividends unnecessarily.Comment
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