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Rental property: buy personally, or using limited company

Hello. I'm considering buying a property to rent out, using a mortgage. The thought occurred to me that if I set up a limited company and have the com pany buy the property, it puts some distance between my own personal financ ial affairs and those of the property. Specifically, what I am thinking abo ut is the eventuality of interest rates shooting up and finding myself in a position in which the rental property becomes unaffordable. Is it better, in terms of preserving my personal financial status, to use a limited company vehicle for this enterprise, or does it make no difference ? What about rental income; are there significant consequences in respect o f taxation on money made? Cheers. Terry.

Reply to
terry.shitcrumbs
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he thought occurred to me that if I set up a limited company and have the c ompany buy the property, it puts some distance between my own personal fina ncial affairs and those of the property. Specifically, what I am thinking a bout is the eventuality of interest rates shooting up and finding myself in a position in which the rental property becomes unaffordable.

a limited company vehicle for this enterprise, or does it make no differen ce? What about rental income; are there significant consequences in respect of taxation on money made?

One thing to consider is if your ltd goes out of business you'd lose the pr operty. Could you take a loan from your existing ltd and buy the property i n your own name? Then you might get a capital gains tax allowance.

Reply to
Stephen

No it doesn't. Shares of the Ltd company are yours, and would be treated like cash by any creditor.

Any mortgage company would would you to sign as well as the Ltd company. I'm not aware of any that wouldn't?

The usual advice is to buy it in your own name. If you don't think you can cope with increased payments, perhaps you ought not purchase?

Reply to
Fredxxx

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