In the last few years a big trend in the property sector has been people buying residential investment property using a company structure.
Until a few years ago company buy to lets were rare for the very wealthy and any mortgage finance was expensive.
However in the Summer of 2015 the Government introduced changes to limit the deductibility of mortgage interest and as a result there has been a considerable shift to either investors selling up or incorporation.
You need accounting advice as to whether a company structure is right for you and it will depend amongst other things upon whether you are trading in property or holding for investment.
The potential benefits are that corporation tax treatment on your profits could be more advantageous than you being taxed as income tax. The company structure will also enable you to have flexibility as to the withdrawal of profits.
As of April 2020 mortgage interest will no longer be an allowable expense for individual property investors but it will continue to be so for companies. These changes are now being phased in.
There are also opportunities to mitigate against IHT.
In addition to the potential tax benefits you are able to limit your personal liability through a limited company unless you are required by a lender to give a personal guarantee.
At Attwells we have identified the trend to company buy to lets and acted for a number of investors on incorporation. There is complex SDLT advice that may be required around incorporation which needs to be considered.
We are also experienced in acting for the major lenders in the market and have experience of their security documentation. Related to this point we offer Independent Legal Advice to directors undertaking a company purchase or refinance.
What is excluded from the service?
- Legal advice outside the scope of the conveyancing service
- Tax advice
The fees payable for company buy to lets are as per the Attwells Residential Calculator save that an additional sum of £225 plus VAT is due.
In the event that it is a company buy to let purchase using mortgage finance or re-mortgage then £749 plus VAT is due on top of our residential fee scale.
Land Registry Fees are due and will be payable based upon the purchase price and using the registry fee scale.
If the buyer is a company taking lending then a Companies House fee will be payable of £23.
In all cases bankruptcy and final searches will be due of £25.
If the premises are leasehold then notice of the transfer of the premises will need to be served on the Landlord whose costs typically range from between £50 and £200. We will confirm he figure once it is known to us.
How long will it take?
Timescales vary and on average it will take 4-6 weeks but it depends upon a number of factors outside of our control. We will endeavour to complete the matter quickly as possible within your timescales.
Who will do your work?
When will I pay?
You will need to pay 50% of the fixed fee on account together with the search fees. The balance of fees and disbursements will be due on completion.
How do I instruct Attwells Solicitors
Instructing us is simple. You can either click on the instruct button below to register your interest or you can call us at your local office. We have offices in Ipswich, Colchester and London. When instructing us please inform us of the office you would like to use.