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Previously on "Anyone still looking at buy to let?"

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  • Old Greg
    replied
    Originally posted by psychocandy View Post
    since it upsets you so much I was planning to revamp it soon anyway.
    Would you like NLUK and me to write it for you?

    Leave a comment:


  • northernladuk
    replied
    Originally posted by psychocandy View Post
    since it upsets you so much I was planning to revamp it soon anyway.
    Doesn't upset me. You've just said it was a long time ago and other comments around why other people keep digging it up but it's there in your signature like a badge of pride. I don't understand why you don't just take it off and attempt to put it behind you.

    Leave a comment:


  • psychocandy
    replied
    Originally posted by northernladuk View Post
    You checked your signature recently. Doesn't really help does it.
    since it upsets you so much I was planning to revamp it soon anyway.

    Leave a comment:


  • Old Greg
    replied
    Originally posted by psychocandy View Post
    Been a while OG. Dont think they even do giro cheques any more do they? Straight into bank account matey.
    I bow to your superior expertise on the matter.

    Leave a comment:


  • northernladuk
    replied
    Originally posted by psychocandy View Post
    I get the impression that because I claimed JSA once over 2 years ago I am now eternally damned in your eyes?

    Might not sleep tonight after that or I might even cry myself to sleep.....
    You checked your signature recently. Doesn't really help does it.

    Leave a comment:


  • psychocandy
    replied
    Originally posted by Old Greg View Post
    I don't think petrol stations accept giro cheques as payment.
    I get the impression that because I claimed JSA once over 2 years ago I am now eternally damned in your eyes?

    Might not sleep tonight after that or I might even cry myself to sleep.....

    Leave a comment:


  • psychocandy
    replied
    Originally posted by Old Greg View Post
    I don't think petrol stations accept giro cheques as payment.
    Been a while OG. Dont think they even do giro cheques any more do they? Straight into bank account matey.

    Leave a comment:


  • Old Greg
    replied
    Originally posted by psychocandy View Post
    Aw I'm filling up here.
    I don't think petrol stations accept giro cheques as payment.

    Leave a comment:


  • psychocandy
    replied
    Originally posted by northernladuk View Post
    I never said you were a scroat. I said as a contractor you are a disgrace.
    Aw I'm filling up here.

    Leave a comment:


  • zcapr17
    replied
    Getting back to the original question...

    Originally posted by b0redom View Post
    Anyone still considering buying new places? How are you planning on doing it? Through a shell company? Personally? Something else?
    I have two rental properties in my own name and am currently reviewing whether to continue to invest personally or switch to investing via a limited company for future purchases.

    I've talked to several accountants over the last week and built a spreadsheet to model the various structures for investing in property. The three options I've looked at are outlined here.

    Key things I've discovered:
    • Getting money into an SPV: Loaning money from my contracting company directly to a new SPV is much more efficient that taking divis and then re-investing the personal funds into a stand-alone SPV. However, if you go down this route, the loan must be at a commercial interest rate (this doesn't result in any more tax, it just shifts profit from one company to the other), and more importantly, your contracting company will be ineligible for the flat-rate VAT scheme and would have to use standard VAT. My contracting company benefits to the tune of several thousand £'s per year from flat-rate VAT compared with standard VAT, so this is significant.
    • Regarding VAT in general, residential rent is VAT-exempt. That means an SPV cannot charge VAT on the rent and cannot recover any input tax incurred. So a property SPV would not be VAT-registered, regardless of the VAT status of the parent contracting company.
    • In terms of getting profits out, property investment companies are not eligible for Entrepreneurs' Relief, so profits would need to be extracted as dividends. However there are also other options for disposal such as selling on shares in the SPV, which gives important flexibility compared with investing personally.


    My model allows for SPV running costs, higher mortgage rates and legal costs, and the effect of losing flat-rate VAT benefits in my contracting company. I've factored in a 1.5% premium on mortgage costs via an SPV compared with personal BTL mortgages. However it's worth noting that the mortgage advisers I've spoken to expect this gap to narrow over the next few years as more investors switch to using SPVs.

    After crunching the numbers it looks like a subsidiary SPV is the best option for me, as I intend to invest for 20-30 years. If I was investing short-term (less than 10 years) then doing it personally would be the best option. This is mainly due to the differences in how capital gains are treated.

    HTH

    z.

    Leave a comment:


  • northernladuk
    replied
    Originally posted by psychocandy View Post
    Flippin heck NLUK - are you sort of admitting I might not be a scroat even if I claim benefits?
    I never said you were a scroat. I said as a contractor you are a disgrace.

    Leave a comment:


  • psychocandy
    replied
    Originally posted by northernladuk View Post
    I was watching Benefits Street the other day. Always makes me think that anyone claiming benefits it's a oxygen wasting scroat.

    Seriously man, these programmes are made to be car crash watching. Letting one of these skew your thinking isn't right smart.
    Flippin heck NLUK - are you sort of admitting I might not be a scroat even if I claim benefits?

    Leave a comment:


  • northernladuk
    replied
    Originally posted by psychocandy View Post
    Watching the TV programme "Nightmare Tenants and Slum landlords" always puts me off BTL.
    ..
    I was watching Benefits Street the other day. Always makes me think that anyone claiming benefits it's a oxygen wasting scroat.

    Seriously man, these programmes are made to be car crash watching. Letting one of these skew your thinking isn't right smart.

    Leave a comment:


  • Hobosapien
    replied
    Originally posted by psychocandy View Post
    Obviously, when the mortgage is paid off he'll be left with ownership of a flat which he can then sell I suppose.
    He could sell it now and settle the outstanding mortgage (assuming it's worth more currently).

    By continuing he's gambling that the place will be worth more in the future for the time frame he is thinking of holding it for. Maybe he'll be right.

    Leave a comment:


  • psychocandy
    replied
    Originally posted by MrMarkyMark View Post
    Your mates a total mug, then.

    Sounds like he will never make money out of it, IMO.
    He bought the flat and lived in it. Then he inherited a house and now lives in that. So rather than sell the flat he decided to rent it out.

    Obviously, prospective tenants will only pay the going rate for rental. They don't care how much the service charge or your mortgage is.

    Obviously, when the mortgage is paid off he'll be left with ownership of a flat which he can then sell I suppose.

    Leave a comment:

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