Complex Buy To Let
BTL2022: Almost a third of active BTLs in limited companies
The drive to place investment properties in a tax efficient limited company wrapper continues with 47,400 new limited companies set up in 2020, brokers heard at the Buy to Let Market Forum in Salford.
Matt McCullough (pictured), national sales manager at Aldermore Bank said 29 per cent of active buy-to-lets are sat in limited companies, a three per cent uplift from last year.
UK buy to let companies hold a total of 583,000 mortgaged properties, or almost a third of all outstanding buy-to-let mortgages.
As the percentage of financing costs reduced to 0 per cent in the tax year ended 2021, one out of every two buy-to-let mortgages were taken out by landlords with a company.
McCullough outlined the substantial benefits of using these tax efficient wrappers, although he warned against adding children’s names as shareholders, however well-intended, because it is illegal.
He said the Aldermore limited company product allows up to six shareholders or directors, day one trading within a Special Purpose Vehicle (SPV) wrapper, fees assisted legals, and product switches among other benefits including capital raising.
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