How to structure your portfolio?🤔- Ltd Company vs Personal Ownership 😎

“There are only two things certain in life: death and taxes” As a landlord one of the biggest things you need to consider is...

“There are only two things certain in life: death and taxes”

As a landlord one of the biggest things you need to consider is how to structure your business for tax purposes. When I first started 12 years ago everybody just bought in personal names since there was very little difference in tax rates between personal ownership and owning through a ltd company.

That all changed about 4 years ago when George Osborne introduced Section 24 and interest was no longer tax deductible and instead you received a 20% tax credit.

This all sounds very dry and boring but in essence your “effective” tax rate, when owning property personally, could be in extreme cases 90%, 100%+ – you could essentially subsidise the property to pay tax!

So what does that mean? Do you just buy through a ltd company?

Well no, what you need to consider is the availability of mortgages and the difference in mortgage rates – ltd company mortgages can be 1-1.5% higher (50% of the total cost). So what you save in tax you could lose in mortgage payments?

The whole thing is incredibly complicated – that’s why we got Gary, our buy-to-let mortgage EXPERT to explain ALL!

See our video below where we cover everything from Section 24, setting up a ltd company to the different rates available 👇