Living In Btl Owned By Your Own Company

[Longtermrenter]

I realise this might belong in a different part of the forum but bear with me.

I have about 50k in my company and no real means of investing it. I can't get a mortgage at the moment and wondered if I could get a BTL mortgage fairly cheaply through the company and then live in the property myself. I'm aware I would have to pay market rent. I'm aware that this is a no-no for normal BTL bit wondered what the banks positions are for Ltd Companies as they are a separate entity under law. Any info anyone has is greatly appreciated and yes I have Googled!

[porca misèria]

I realise this might belong in a different part of the forum but bear with me.

I have about 50k in my company and no real means of investing it. I can't get a mortgage at the moment and wondered if I could get a BTL mortgage fairly cheaply through the company and then live in the property myself. I'm aware I would have to pay market rent. I'm aware that this is a no-no for normal BTL bit wondered what the banks positions are for Ltd Companies as they are a separate entity under law. Any info anyone has is greatly appreciated and yes I have Googled!

I investigated that years ago, when I was looking at a former village post office that was up for sale. The idea was to split it with myself: company owns post office (which becomes my office); I own and live in flat above. Company portion would be fully paid for while my portion would be mortgaged at around 100%.

The answer in principle then was yes, but it would be significantly more expensive. Dunno how much of that would still apply today.

A simpler way to deal with most of £50k would be to make a large company contribution to your own pension. Unless you already have that maxed out.

[Longtermrenter]

I don't have a pension and draw minimum amount PAYE.

[Longtermrenter]

Too busy paying the rent for a pension!

[pricesmad]

speak to your accountant the tax would be my primary concern I don't think it works out that well from memory, think you pay tax on the drawing then tax on the profit from the rent once it goes to the company, something like that, then capital gains on the property when you sell it.

[Crumbless]

So couldyou purchase a Buytolet through a limited company and then as you don't personally own the BTL claim Housing Benefit to pay the rent.

If so i've found a way for the government to buy us all a house!

Edited August 5, 2016 by Crumbless

[spunko2010]

Do you have £50k after paying corporation tax etc? Or before? Would there be enough to cover other costs that might arise?

Be aware HMRC are keen on auditing companies that withdraw a lot of their funds and risk leaving the company short. I speak from experience!

[thewig]

Holy ****, hell yes. Buy one up, stick it on the company account, do a basic cheapo refurb (good enough for a rental) stick yourself in there on a six month rolling with one month break clause, just put the rents up, innit. If your tenants (ie you) don't like it, you can always fill it with eastern euros or students on the sly.

[Solitaire]

I realise this might belong in a different part of the forum but bear with me.

I have about 50k in my company and no real means of investing it. I can't get a mortgage at the moment and wondered if I could get a BTL mortgage fairly cheaply through the company and then live in the property myself. I'm aware I would have to pay market rent. I'm aware that this is a no-no for normal BTL bit wondered what the banks positions are for Ltd Companies as they are a separate entity under law. Any info anyone has is greatly appreciated and yes I have Googled!

My son recently phoned around to see how much of a mortgage he could get. As he's self employed and his 2014/15 profit was lowish due to changing the direction of the business he was only offered 60k mortgage. As it happens that would be enough as he's got a huge deposit but he phoned a mortgage broker to see if he could achieve more and the broker suggested going the BTL route. Not sure of the costs of doing it this way, nor how it's structured but yes, I guess it's possible seeing as the broker suggested it.

[Longtermrenter]

So couldyou purchase a Buytolet through a limited company and then as you don't personally own the BTL claim Housing Benefit to pay the rent.

If so i've found a way for the government to buy us all a house!

I'm not looking to do that. I'm just trying to find a way of actually using the money for something that will benefit me. I'm not looking to save money, just to get a permanent home for my family. In answer to spunko 2010 the money is after corporation tax and might even be 65,000 in a few months. I think as suggested it is time to talk to the accountant. Really I just want to move to France but there are problems with that, i.e, work and language and now worse exchange rate.

[radoc]

I've looked at this myself. Unless you pay a market rent it appears that you will be taxed as a benefit in kind. Not sure how that works if you're not employed by the company but are a director.

[Longtermrenter]

I've looked at this myself. Unless you pay a market rent it appears that you will be taxed as a benefit in kind. Not sure how that works if you're not employed by the company but are a director.

i'm employed as the director and main worker. I don't mind paying market rent - I'm paying that anyway!

[Ah-so]

No, this will be against the T&Cs of most BTL lenders. Of course you can do it surreptitiously and it is unlikely that they will find you out, but they would not send the mortgage statements to that address, for example. Allowing a blatant circumnavigation of the MMR rules would get them into trouble with the regulator.

[spunko2010]

Speaking of breaking the rules how the hell do you get 11 mortgages?!?

http://www.kentonline.co.uk/thanet/news/supermarket-manager-stole-81k-to-100281/

[porca misèria]

I don't have a pension and draw minimum amount PAYE.

Then problem solved. Put the £50k into a pension and you've drawn it out of the company free of all taxes. The normal limit is £40k/year, but you can carry over from having put in less than that in recent years.

Actually it's even better than that. The pension contribution, like your salary, is not company profit. So you don't pay corporation tax on it, either.

The downside to that is the lifetime limit, if you're a high earner every year over most or all of a working lifetime.

[goldbug9999]

So couldyou purchase a Buytolet through a limited company and then as you don't personally own the BTL claim Housing Benefit to pay the rent.

If so i've found a way for the government to buy us all a house!

Wont work because housing benefit is means tested and would take the net asset value of your company (which would include the equity in any property the company owned) into consideration.

[Crumbless]

Wont work because housing benefit is means tested and would take the net asset value of your company (which would include the equity in any property the company owned) into consideration.

Damn i thought i'd come up with a way to get everyone in Britain a free house without working, will have to stick to a couple of million getting free houses then.

[Longtermrenter]

Then problem solved. Put the £50k into a pension and you've drawn it out of the company free of all taxes. The normal limit is £40k/year, but you can carry over from having put in less than that in recent years.

Actually it's even better than that. The pension contribution, like your salary, is not company profit. So you don't pay corporation tax on it, either.

The downside to that is the lifetime limit, if you're a high earner every year over most or all of a working lifetime.

Thanks, that doesn't solve my problem of needing a permanent home. I'm in my 40's

[Unknown user]

Wont work because housing benefit is means tested and would take the net asset value of your company (which would include the equity in any property the company owned) into consideration.

So might work if you buy now and the equity gets wiped out in a hpc

[porca misèria]

Thanks, that doesn't solve my problem of needing a permanent home. I'm in my 40's

I was in my 40s when I started the pension, with three years of big contributions.

It did wonders for the house purchase fund. Now after 8 years, there's enough to buy an above-average house within the pension and another outside it. Or would be, if I liquidated all my investments, including the 17-18% or so that generates the tax-free dividends that pay the rent with something to spare. All of which comes as a huge surprise to me, as it's much more than my total income over the period, and it was only after five years that the income covered the rent.