Finance –buyinganinvestment property

Buy to let Company or personal?

ary Anne argeant,Partner atM+A PartnersAccountants, guidesyou throughtheprocess.

Are youthinkingabout buyinganinvestment property, or perhaps you already ownabuy-to-letand arelooking to expand your portfolio?Ifso,you mayhave questionsaroundthemost beneficialsetup foryour circumstances –shouldyou purchaseandmanageasan individual or through alimited company? Iftheintention is to rent outone or twoproperties, settingup alimitedcompany isunlikelytobethe right route. However,if aproperty portfolio is to be builtup,then itmaywellbehelpfultocreate a limited company from the outset.

Company ownership

Buying a property through a company is becoming an increasingly popular choice for investors. According to Companies House data, a record , newUKbuy to letcompanies were incorporatedin . Purchasing arental property through alimitedcompany o ersfulltax relief on finance costs such as mortgageinterest andarrangementfees, access to potentiallylower tax ratesand flexibility forplanning. ftheaimis to investin severalbuy to let properties,and thereisnoneed to draw much, or any,income from therent, thecompanystructurecould bean attractive option. ncome receivedfrom rentals canbe retainedwithinthecompany forfuturereinvestment,without impacting yourpersonaltax return.

Personal ownership

f you are looking to use your rent as a form of income to live on, purchasing as an individual may prove to be the more tax e cient solution. However, it’ s worthwhile noting that you can no longer deduct mortgage interest from your property income before paying tax. As well as restricting tax relief to the basic rate ( ), this measure also has the e ect of increasing taxable income and can result in youbecoming ahigher rate taxpayer,inturna ectingcertain benefit entitlementssuch as child benefit. Personal ownership typically attracts preferablemortgagerates andlower feesthanthrough a limitedcompany.Arrangement fees, whichcan either be paid up frontoradded to themortgage, also tendtobelower when you arebuyingasanindividual.

Mary-Anne Sargeant

There are many variables that will influence your decision on how to purchase your buy-to-let properties, and it can be helpful to seek professional advice. At M+A Partners Attleborough, we have an experienced tax team who will be able to assist with any queries you might have when starting out on your buy-to-let journey. Get in touch with us on 01953 452077 or email

mary-anne.sargeant@

mapartners.co.uk. Visit our website mapartners.co.uk/ property for a range of downloadable property related resources. For the latest accounting and tax updates, sign up to our newsletters at mapartners.co.uk.

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