3 reasons to set up LTD company for buy-to-let properties | Money Matters | Touchstone Education


– Welcome to Money Matters!
(uplifting music) Today, I want to talk to you about buying property into a company. (upbeat music) Most people think this
is really complicated so they don’t do it and they buy property in their personal name. Now, having the house that you live in in your personal name, that’s fine, but having investment
property in your personal name isn’t really that great. So the reasons why I like
buying into a company; number one, it’s very
easy and simple to do. You open your company on Companies House, your company needs a bank account, and then when you go
and offer on a property, instead of offering and
giving your personal details, you tell them the company’s details. And then you get the
finance for the property through the company. Very simple and straightforward. The second reason why I like this, is because it cuts out Section 24. So as a landlord, if you own
property in your personal name, your, you will get hit
by the Section 24 taxes. If you’ve got a company, it
doesn’t apply to companies, so straightaway you have a saving there. Now the third reason why I like
buy property into a company, is because like most of
you, I’ve got my own house, my car, I’ve got my children,
so I’ve got my assets to protect and my life to protect. So if something happened
to my investment property, I wouldn’t want it to
affect my family home, or what I can give to my children. So, if I bought property
in my personal name, it would affect, if something happened, that you know, they might
come and want my family home, or it might affect my children
and what money I’ve got. If I buy it into the
company, I’m ring fencing it in the company so it won’t impact, if something does happen,
or if for some reason, you know, I can’t pay the
mortgages for them properties, it’s ring fenced in the company so it protects me personally. So I desperately believe that everybody should buy property into a company, and I think it’s the most tax efficient and simple thing to do,
and it will save you time. One of the other reasons is
I, I’ve got a full time job, I love my job, I would never give it up, and I do property on the
side, ready to give me more money to live now, and
also more money for the future. So I’m a 40% taxpayer,
probably a bit more, but I don’t like to look, but so, buying property into a company means my company’s making the money, and means I’m personally
not hit with that tax. I’ve now got money in my company to do with what I want with,
so what I tend to do is buy more properties from that money. Which means, again, that
money is not hit by any tax ’cause I can just keep it
in the company and buy more. Also if I want to take
money out of the company, I can take it out with
a salary, dividends, I can claim mileage, and I can do all that through the company, which I can’t do when I’ve got it personally. But the main things you need to remember, and what trips people
up, is it doesn’t matter what your company’s called,
you can go on Companies House and change it any time. I know people that stopped
them from opening a company because they can’t
decide what it’s called. Just open A Property Limited or something. Buy an in. The second thing
you need to do is you need to make sure you’ve got
insurance for your company. So you want professional
indemnity insurance, and you want to speak to
a good insurance broker who will tell you what
you need for your company. Again, looking after your
company and you as director. And then the third thing
you definitely need when you open a company
is a good bank account. I’ve had very bad experiences
with some business banks, who aren’t helpful and not helpful when you’re wanting to do things. I tend to go for Metro Banks these days, because I think they’re great,
you can get hold of them all the time, and they give
you an account manager, even if it’s your very first business, and you’ve got no money in it, you get someone that looks after you, which I think is phenomenal. But check out your banks and make sure you get a good bank account. The main thing, it’s easy
to access and easy to take screen shots of when you’re
sending things around. The other thing that I
would recommend is you get a really, really good accountant. Now, for this person, they need to have, they need to have experience in property and understand how it works,
and all the tax benefits and rules that you need to
play when doing property. So I always ask my accountant,
“have you got property?” and always ask to speak to
one of their other clients to make sure they’re
giving you good service, ’cause the last thing you want to do is be chasing your accountant. So I, with my accountant,
I pay my accountant about 100 pounds a month for my business, they do all my accounts,
and they give me monthly management account reports
so I can keep up to date on how my properties are performing, and what cash I’ve got in the business. This is all very important
when you’re buying property because you want to make sure the property is performing like it should.

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