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Jun, 2017

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  1. #1

    Default Personal BTL equity to LtdCo

    Person X has amount A loanable equity in BTL1 held personally. X now wants to release equity A, add cash B and buy BTL2 via a newly setup sole director Ltd Company.

    LtdCo can claim the interest on amount A (and B) as it is a business. So far so good.

    Now, this interest will be earnings for X. This income from A will however take X to higher rate tax, defeating the original purpose.
    Is there a way to handle this?
    e.g. can LtdCo pay interest on A directly to the bank, therefore X not touching it, and therefore not taxable on self-assessment?

    As a side question: amount A is much higher than the original loan with which BTL1 was bought(now paid back). Does this mean that the interest on amount A cannot be claimed as expense in self assessment anyway?
    Last edited by hospitality; 19-06-2017 at 14:35 PM. Reason: Pressed button too early

  2. #2
    Join Date
    Aug 2008
    Posts
    5,349

    Default

    Person X ( or You ) needs to seek expert advice from a professional tax accountant , and not rely on comments from forumers about complex tax issues. The cost of tax advice can be charged to rental income.

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