How can I show a deposit for a limited company I own while transferring a property to myself? For example, if I need to show a £90k deposit for a property valued at £300k, and I have £150k remaining on the mortgage with £150k in equity, how can I use £90k of that equity as the deposit without needing to put in £90k in cash?
Thanks for this! I saw the following in an Article (extract): 'You can choose how much interest to charge and it will count as: a business expense for the company, and personal income for you You will need to report this income on your Self Assessment tax return. Additionally, the company must: pay you the interest less the basic rate of Income Tax (20%) report and pay the Income Tax to HMRC every quarter using form CT61' Question: Why does the company pay basic rate of Income Tax on the interest payable? Technically it would not be a fully deductible business expense right if it has to pay 20% on it? Kind regards, Kush
@@UK-Property-Tax-Accountants Ok thanks for the reply! So technically the £1,000 interest that we'd take out tax-free (assuming basic rate taxpayer) actually costs us (or technically the company) £250.
How about I get loan from the bank and then lend it to my company with an interest? Does the interest I pay to the bank tax-deductible for my personal income tax?
Actually there is a piece of tax legislation that allows you to put the loan into the company. The interest is paid by the company without you picking up a tax charge. Speak with your accountant before you do anything Max. It is easy to get this wrong
Important - read this www.optimiseaccountants.co.uk/knwbase/using-a-limited-company-to-buy-property/ Free tax training courses www.optimiseaccountants.co.uk/courses/ Download our FREE property investors checklist www.optimiseaccountants.co.uk/property-ebook-and-check-list-download-thank-you/ Our live events www.optimiseaccountants.co.uk/tax-seminars/
I thought the video explains about the lending between 2 limited companies?
Rather than director lending to Limited company!!
Good point it is not as clear as you (now I) thought it should be. Making changes to the title, thumb nail and intro.
How can I show a deposit for a limited company I own while transferring a property to myself? For example, if I need to show a £90k deposit for a property valued at £300k, and I have £150k remaining on the mortgage with £150k in equity, how can I use £90k of that equity as the deposit without needing to put in £90k in cash?
Get a good bookkeeper is my advice.
Can I repay director loan I use to pay for deposit before I pay corporation tax? Or I pay only from profit I make?
Corporation tax is based on profit and ignores directors loans. Hope that helps
Thanks for this! I saw the following in an Article (extract):
'You can choose how much interest to charge and it will count as:
a business expense for the company, and
personal income for you
You will need to report this income on your Self Assessment tax return. Additionally, the company must:
pay you the interest less the basic rate of Income Tax (20%)
report and pay the Income Tax to HMRC every quarter using form CT61'
Question: Why does the company pay basic rate of Income Tax on the interest payable? Technically it would not be a fully deductible business expense right if it has to pay 20% on it?
Kind regards,
Kush
To be honest I do not know why this is the case but I know we ensure our clients follow HMRCs protocols
For every £100 interest £20 goes to HMRC and £80 to the beneficiary
@@UK-Property-Tax-Accountants Ok thanks for the reply! So technically the £1,000 interest that we'd take out tax-free (assuming basic rate taxpayer) actually costs us (or technically the company) £250.
@kushmuthy5571 correct 👍
Thanks for this
You are welcome Michael
What interest rate can u reasonably charge?
What ever commercial rate is deemed fair per the banks
How about instead of taking money out from main company and lend it to another BTL company? Is it still possible?
Yes, you can do this
How about I get loan from the bank and then lend it to my company with an interest? Does the interest I pay to the bank tax-deductible for my personal income tax?
Actually there is a piece of tax legislation that allows you to put the loan into the company. The interest is paid by the company without you picking up a tax charge. Speak with your accountant before you do anything Max. It is easy to get this wrong
@@UK-Property-Tax-Accountants thanks for the advice!
thanks useful content
You are very welcome and I’m delighted it helped
Is it a repayment loan or interest only ?
That is your choice either / or
Thank you. Repaying an entire deposit would be difficult.