Ensuring High Efficiency in Buy-to-Let Property Investment

Chris Frame

The recent global pandemic has reminded many of us that we value stability, and now more than ever it is advantageous to focus on the assets that are most likely to weather uncertain times. Property has of course historically proven to be stable, delivering asset growth and producing income via rental payments.

The UK has long had a thriving property market

with residences to buy and to rent consistently in high demand. It’s also home to one of the largest global financial centres, and prides itself on conducting business- particularly property transactions- with high levels of transparency and simplicity. These elements all make purchasing Buy-to-Let property in the UK an appealing proposition to local and overseas investors alike, all of whom are looking to do this as quickly, securely and efficiently as possible.

One of the best ways to do this is to purchase a Buy-to-Let property via a UK limited company

which offers a whole host of benefits in comparison to purchasing in one’s personal name. An investment in Buy-to-Let property operates as a business, and because companies are built for business it’s natural that significant advantages arise from purchasing Buy-to-Let property through a company structure. The most outstanding of these benefits is improved tax efficiency. When a property is purchased via a company, the owner or owners of the company can deduct mortgage interest from their UK tax bill. With personal ownership, owners only receive a basic rate credit. Owners can also easily and more efficiently take rental income from the company by means of dividends or via owner loan repayments, and benefit from lower capital gains tax on the sale of shares upon exiting the investment.

Additional benefits include limited personal liability (as the company is a separate legal entity) and the ability to easily buy and sell with other investors. It’s also valuable when it comes to estate and inheritance planning, as company owners can more easily distribute shares in the property to their beneficiaries and manage inheritance tax (IHT) with greater flexibility.

While many investors are aware of these advantages, it has typically been prohibitively time-consuming and costly for investors (particularly those overseas) to set up a company via which to buy and sell property. New solutions are emerging, however, and one of these is GetGround, a technology platform designed specifically to set up and run UK limited companies to purchase UK Buy-to-Let properties.

The use of companies for Buy-to-Let property is growing fast.

More than 30,000 properties have been purchased via this structure in the last 12 months, an increase of 20% on the previous year. Like so many other industries, property is being revolutionised and transformed via technology, opening up new and exciting opportunities for investors.

Chris Frame
(VP Growth and Business Development)
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