Limited companies being used by landlords
To avoid the higher taxes being introduced by the government more and more landlords are using limited companies when applying for their buy-to-let finance, lenders are responding to this new demand by offering an increasing number of loans available to those who apply through registered businesses.
Landlords will be taxed on the full rental income by 2020, with only a 20 per cent tax credit allowed, however if they buy through a limited company they will still be able to deduct mortgage interest when calculating profits, being faced with corporation tax at 20% rather than income tax up to 45%,
A recent study by broker Mortgages For Business reportedly found that limited company applications for buy-to-let mortgages surged from 15% of all requests in October 2015 to 38% in December.
Professional advice should be sought before making your final decision on such matters.