The business of being a landlord is changing fast. HMRC have made it difficult for Landlords to make a “profit” from rental for Landlords who have a mortgage.

With rising interest rates, the gap between payments and rental has closed and in some cases, after tax, the rent may not cover the mortgage.

Landlords are now taxed on the whole amount of rent received and are unable to offset the mortgage payments they make. With rising mortgage rates, the options for landlords are very limited.

Moving your portfolio to a Limited Company

Most Landlords hold their properties as personal assets, in the last few years changes in legislation means it is easier than ever to hold your properties within your own Company. More and more lenders are happy to arrange mortgages for limited company buy to lets. Using a company set up, has several benefits including:

Tax relief on mortgage interest.

Lower tax rates on profits.

Transferring ownership to reduce Inheritance Tax.

Limited liability and increased credibility.

By putting your portfolio into a Ltd company landlords can offset all the mortgage interest against the rental income before paying tax, this can save a significant amount of money over the term of the mortgage.

It is also up to you as the landlord if you want to take money from the Ltd company at all! The Ltd company acts as a wrapper around your Buy to Let income and is taxed accordingly.

We understand that everyone is different, and circumstances are individual. We work with several accountants who specialise in property tax advice. Now is the right time to take advice to see what course of action is right for you.

The first step is a conversation with one of our experts.

If you’d like to learn more about mortgage products and how we can help you, please don’t hesitate to get in touch with our team. We’re here to help you navigate the ever-evolving world of mortgages and guide you toward a brighter, greener home.

Leave a Reply

Scroll to Top