Buy to let developers who buy first time buyer type property to exploit those seeking their first home exacerbate the housing crisis and fuel house price inflation - they should be subject to high rates of taxation as a deterrent.

Edited by hedgehog50 (21 Nov 2017 12.53pm)

We have now sunk to a depth at which the restatement of the obvious is the first duty of intelligent men. [Orwell]

Simple things worth thinking about are who your shareholders are - making kids and spouse shareholders from the start allows them a stake and spreads gains.

Also think about funding the company via a shareholder loan (interest free) rather than equity. That way you can take out cash from rents by way of loan repayments which are tax free.

Beware CGT when putting properties you currently own into a company. This is likely to be a chargeable event, meaning if they are worth more now than when you purchased them you'll have to pay a "dry" tax charge. You may also have to pay SDLT on the transfer. If they are residential and worth over £500k you'll be subject to ATED.

One big benefit of SPV is no restriction on deductibility of mortgage interest

You may well know all of this!

What the f*** is Tax !!

Pro USA & Israel

Thanks Cambridge, yep I think I've covered the Shareholder / Directors Loan part.

The CGT issue for transferring properties into the SPV is exactly why I'm selling it (It's my main residence) before then moving the money into the Company structure and then getting started.

It's taking a while, to get all the ducks in a row due to the increased legislation, taxation issues (which I'm sure Hedge would be pleased to note) however I agree that its only right and proper that wether 'flipping' or building up a portfolio the Government are now squeezing individuals to ensure that it's all above board and they pay their fair share.

I actually WASN'T aware of the bit in bold though, so will look into that some more moving forward.

Thanks

Edited by Lyons550 (21 Nov 2017 1.12pm)

The Voice of Reason In An Otherwise Mediocre World

That's why I put 'buy to let'.

We have now sunk to a depth at which the restatement of the obvious is the first duty of intelligent men. [Orwell]

I've lived through two cycles now where making "easy" money from property development has just pre-empted a sharp downturn in the property market, wiping out numerous development companies that are not well run nor well enough funded to sit out a period where the market dries up and a quick "turn" becomes a two year millstone around liquid funds that are needed to keep the companiy's profitability oiled.

Not saying not to do it Lyons, and there are some very wealthy people out there who have, but in a decade where the words "that'll never happen" have become the most accurate way to forecast the future, beware of thinking that "that'll never happen" to this property market.

Living down here does have some advantages. At least you can see them cry.