Call one of our expert advisors now on 0333 335 6595 or leave your details below

Benefits of Buying a Property in the UK through a Limited Company vs. Personal Name

Buying Property in the UK; Limited Company vs. Personal Name

When considering purchasing a property in the UK, exploring the options available, including buying it through a limited company or in your name, is essential.

Sep 2023 | Buy To Let

When considering purchasing a property in the UK, exploring the options available, including buying it through a limited company or in your name, is essential. This blog will explore the advantages of purchasing a property in the UK through a limited company vs. personal name. We will highlight critical benefits such as tax relief, transfer of ownership, stamp duty savings, estate planning, and flexibility in changing directorship.

  1. Tax Relief: One of the significant advantages of purchasing a property through a limited company is the potential for tax relief. Unlike personal ownership, where income tax is payable on rental income, limited companies are subject to corporation tax, currently set at a lower rate. This can result in more favourable tax treatment and increased profitability for property investments.

  2. Transfer of Ownership: A property owned by a limited company offers greater flexibility in transferring ownership. In the case of personal ownership, transferring ownership can be complex and expensive, involving legal procedures such as conveyancing. Conversely, moving shares in a limited company is more straightforward, allowing for a more efficient transfer of property ownership.

  3. Stamp Duty Savings: Stamp duty, a tax paid when purchasing property, can be a substantial expense. However, buying a property through a limited company can provide potential savings. In 2016, the UK government introduced higher stamp duty rates for individuals purchasing additional residential properties. Limited companies, conversely, are exempt from these higher rates, resulting in potential cost savings for property investors.

  4. Estate Planning: Purchasing a property through a limited company can offer advantages in terms of estate planning. Property assets can be more easily transferred to beneficiaries using a limited company structure, allowing for smoother inheritance and reduced complexities associated with personal estates. This can particularly benefit those interested in long-term wealth preservation and succession planning.

  5. Changing Directorship: Another advantage of buying property through a limited company is the flexibility to change directorship. Changing the ownership structure can be cumbersome and time-consuming in personal ownership. However, in a limited company, the transfer of shares allows for more straightforward changes to company directorship, offering greater agility and adaptability for investors.

Conclusion

While purchasing a property in the UK can be done in your personal name, buying through a limited company presents numerous benefits. Tax relief, transfer of ownership, potential stamp duty savings, efficient estate planning, and the ability to change directorship easily are all compelling reasons to consider the limited company route. However, consulting with legal and tax professionals is essential to determine the most suitable approach based on individual circumstances. With careful planning and consideration, buying a property through a limited company can provide substantial advantages and help maximise returns on investment. We recommend you discuss your plans with GetGround, who specialise in setting up and managing your limited company investment. 

 

Ready to make informed mortgage decisions? Contact us for expert guidance. Our experienced team of mortgage specialists is here to assist you every step of the way. Whether you’re a first-time landlord, a portfolio landlord or looking to refinance, we can place you with the right experts to provide personalized advice tailored to your needs.

HMO Mortgages Explained: What You Need to Know

HMO Mortgages Explained: What You Need to Know

If you’re a private landlord planning to rent your property as a house share or student flat to three or more unrelated individuals, you’ll need an HMO licence (and a specialized HMO mortgage) to proceed.

Understanding the difference between Buy-to-Let and Holiday-Let Mortgages

Understanding the difference between Buy-to-Let and Holiday-Let Mortgages

Welcome savvy investors and aspiring property moguls to our comprehensive breakdown of the differences between Buy-to-Let (BTL) mortgages and Holiday-Let mortgages. As the heatwaves in the UK draw us all closer to the allure of rural retreats and coastal escapes, the demand for holiday-let homes has surged.

Is buying an investment property as your first home feasible?

Is buying an investment property as your first home feasible?

For many, the homeownership journey begins with a residential mortgage and the dream of living in their place. However, some folks set their sights on investment early, looking to purchase a buy-to-let property for rental purposes as their first step into the property market.

How an FX Broker Assists Overseas Clients

How an FX Broker Assists Overseas Clients

Introduction to the UK property market The UK property market has long been a beacon for international buyers, boasting a robust real estate sector with properties that attract investors from all corners of the globe. Purchasing property overseas, however,...

read more

HMO Mortgages Explained: What You Need to Know

An HMO stands for House in Multiple Occupation. If you're a private landlord planning to rent your property as a house share or student flat to three or more unrelated individuals, you'll need an HMO licence (and a specialized HMO mortgage) to proceed. This setup is...

read more
How an FX Broker Assists Overseas Clients

How an FX Broker Assists Overseas Clients

An FX or foreign exchange broker, with their specialised knowledge in currency exchange transactions, plays a crucial role in international property transactions

HMO Mortgages Explained: What You Need to Know

HMO Mortgages Explained: What You Need to Know

An HMO stands for House in Multiple Occupation. If you're a private landlord planning to rent your property as a house share or student flat to three or more unrelated individuals, you'll need an HMO licence (and a specialized HMO mortgage) to proceed. This setup is...

read more

We’re only a phone call away

Any questions? Our friendly specialists are here to help from 9am to 6pm, Monday to Friday.

Spanish Mortgage Broker