Owning your home.

[denislawsbackheel]

My mum is on an interest only mortgage - house purchased in 2006.

As was my mother in law until the day she died.

 

[Blue Mist]

So he created a company with his mate they get round the tax that way so it’s not bollocks maybe you need to check Rightmove pal before calling people out, https://www.rightmove.co.uk/property-to-rent/find.html?locationIdentifier=POSTCODE^1180759&maxBedrooms=3&minBedrooms=3&radius=3.0&propertyTypes=&includeLetAgreed=false&mustHave=&dontShow=&furnishTypes=&keywords=

And here's me thinking we were talking about mortgages.
You're talking about companies.
Fuck it I'm out.

 

[denislawsbackheel]

43 pages hmmmmmm

The first 2 I looked at Leeds Building Society.... buy to let only. The second Nat West.... buy to let.

Nationwide do them for starters…

Retirement interest only | Nationwide

A Retirement Interest Only mortgage enables you to borrow against your property and pay the interest back in monthly payments.

www.nationwide.co.uk

 

[IrishBlueSince92]

I’m 37, got my first mortgage last year.
It’s a constant struggle to make it to the end of the month after making the mortgage repayments at the start of each month.
We did spend a good bit fixing it up after buying it
Had to take on a second job the last few months to make ends meet
It’s a constant drain on my mood and marriage lol

You don’t know how good it is when you’re young, earning a few quid and no big financial commitments

 

[Kompany Car]

All of that is bollocks. Simply bollocks. There is no system to exploit the tax other than deliberately, criminally avoiding tax. There is no 3 bed semi in Oldham for 1k rent. IF you mean out in the country under the Oldham Post code I'd still call bollocks.

Tax avoidance is legal, tax evasion isn’t.

There are some fairly simple methods of avoiding some of the tax burden by setting up a property investment company, if you’re a high rate tax payer you then only pay cooperation tax at 19% rather than 40 or 45%.

Section 24 which covers mortgage interest tax relief, if the property is within a property investment company you can claim 100% relief.

As it’s a company you can pay yourself a £2000 tax free dividend when you draw down on company profits, the rest of the dividend is then taxed at 32.5% rather than 40 or 45%.

 

[Kirkstall Blue]

Interesting setting up a company but it sounds to complicated for me.
There isn’t much on Rightmove that I would be interested in only property that look like a money pit. Property developers and investors have moved in and bought up all the available houses.
£100 thousand increase since 2017 I know because I sold one in Droylsden it can’t really be justified it’s turning the town into another London

 

[Wafty Cranker]

So he created a company with his mate they get round the tax that way so it’s not bollocks maybe you need to check Rightmove pal before calling people out, https://www.rightmove.co.uk/property-to-rent/find.html?locationIdentifier=POSTCODE^1180759&maxBedrooms=3&minBedrooms=3&radius=3.0&propertyTypes=&includeLetAgreed=false&mustHave=&dontShow=&furnishTypes=&keywords=

unless they bought them a while back
they’ll have paid thousands in stamp duty as limited companies pay a 3% surcharge.

Then they’ll pay corporation tax on any profits and beyond taking out their dividend allowance, or money they’ve already put in, they’ll be liable for tax on the money they take out. The same way another business owner would be.

There’s no loopholes for dodging tax by putting it a limited company.

 

[Kompany Car]

unless they bought them a while back
they’ll have paid thousands in stamp duty as limited companies pay a 3% surcharge.

Then they’ll pay corporation tax on any profits and beyond taking out their dividend allowance, or money they’ve already put in, they’ll be liable for tax on the money they take out. The same way another business owner would be.

There’s no loopholes for dodging tax by putting it a limited company.

The main advantage is if you retain the funds in the business you can grow a property empire much more quickly as you retain more of the profit.

 

[Slipper One]

I’m 37, got my first mortgage last year.
It’s a constant struggle to make it to the end of the month after making the mortgage repayments at the start of each month.
We did spend a good bit fixing it up after buying it
Had to take on a second job the last few months to make ends meet
It’s a constant drain on my mood and marriage lol

You don’t know how good it is when you’re young, earning a few quid and no big financial commitments

Were you paying rent before you took on a mortgage?

The second job is a necessity for now, but it won't be forever.

It's only a drain on your mood and relationship if you allow it to be. Look around you, watch the news and put things in perspective.

 

[Wafty Cranker]

The main advantage is if you retain the funds in the business you can grow a property empire much more quickly as you retain more of the profit.

All landlords I know use the capital growth as the their main source of finance to grow their portfolio. They’ll purchase a property with a mortgage, then years later when it comes to remortgage, if the property has gone up in value, they’ll take out some equity and use that to fund their next purchase.

I’m guessing you might know this already, but as the original property isn’t sold there is no tax due when it’s revalued for the mortgage and the equity is released free of any tax.

That above strategy can be used if it’s in your own name or a limited company.

I do think in most cases a limited company is still the better option, but there is no tax dodge/loophole vs it being in a limited company over your own name like was mentioned previously. Pros & cons to both and one method is not always the best, it comes down to individual circumstances.