4 Ways To Structure Your Property Business | UK Property Investing for beginners | Ltd co or LLP

If you are a beginner investing in property, you will be considering how to structure your property business. Whether to buy property in your own individual name, a limited (LTD) company or a Limited Liability Partnership (LLP).
In this video Ranjan is joined by Mark Alexander, founder of Property118.com. Together they consider 4 ways of structuring your property investment business. An essential watch for beginners looking to get started investing in property.
00:00 | 1. Intro
01:25 | 2. Buy property in Your Own Name (..why it's not a good idea)
04:48 | 3. Buy Property in a Limited company (LTD)
07:30 | 4. Buy Property in a Limited Liability Partnership (LLP)
14:18 | 5. Buy Property in a 'SMART' Limited Company (LTD)
Join Ranjan at the next Baker Street Property Meet, the UK's largest property investors networking meeting. Full details at www.succeedinproperty.com/bakerstreet
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Please use your own discretion and critical thinking when applying any of the information shared, and keep in mind that individual situations can vary significantly. Remember that the content on this channel is not a substitute for professional advice.

[@chris-e-currency2311]

Thank you Mark and Ranjan. That was very exciting and educative.

[@soundslight7754]

Fantastic coverage of the topic. Thank you gentlemen! There was a small slip of tongue in Q4: trust tax isn't 6% per anum. It's 6% every 10 years

[@rajivvashm6046]

so if you register a SMART company well in advance...(today) what fees (& filings ) do you have to do annually to keep it alive ( i.e. total cost)? & do those filings have to be completed by a registered Accountant or DIY (it may take over a year or two before you actually make you first investment into it )

[@funkywubby]

This is great stuff! Valuable and relevant to us all 👍

[@wayne3336]

Thank you for sharing this! Answered a lot of my questions.

[@colincameron5012]

great content very informative - start with the end in mind!

[@manjinder26]

Great Ranjan have to rewatch it few more time. This is extraordinarily information you provided for free. Big thanks 🙏🏽

[@dtek1832]

Such great content - Thanks very much Ranjan!

[@bcvids999]

Another fantastic video Ranjan, I look forward to attending your workshop when they are available!

[@JosephCreates]

INCREDIBLE! so much value here!

[@alimamuk]

Absolutely fantastic vid, thanks

[@VenuGopal-hr3ju]

That is just Amazing Mark and Ranjan. Thank you so much

[@ToxicVaccines_HivHoax]

Very informative video!! 👍👍

[@jimrichardson6946]

Great Ranjan thank you, fascinated watching, very informative, I will watch a few more times for it to sink in and stick with me.

[@Krishanbrothers3990]

This is such a good video and very informative.

[@andrewroberts6670]

What a great video simply sharing how to structure a business. Thanks for such an awesome video

[@thinqfam254]

This is what many charge a handsome sum for. I love you both gentlemen who decided to make the success of others in real estate your gift to next generation. 10Q

[@lizkalu1070]

Thanks so much for this fantastic video and providing such great insight! This is a real game changer Keep up the good work

[@pratheekcm3487]

Great video..very useful to know about various options. Thank you for sharing.

[@TourWithJawad]

One of the best video so far .. bless you guys

[@johnstephens2510]

I need to do it, this has confused me a bit, ill rewatch!

[@ermal446]

Thank you for the valuable information gents!

[@soumyaphilip123]

Great video and high quality content . Learning from 0 , 👍🙏

[@sninaturalhaircare]

Subscribed and can’t wait to watch more

[@121JAB121]

Fantastic video, Ranjan. Will be watching all of your other videos ASAP. Thank you for doing this.

[@StupidIsTheNorm]

Fantastic video. Thank you both

[@jmtworm]

Great information as normal Ranjan, thank you so much

[@dappa0000]

Thankyou so much Ranjan for this video very detailed and very informative Thankyou.

[@sninaturalhaircare]

Loved the info. Wish I could turn the volume just that tiny bit little higher 🤔

[@GeoffreyPapin]

This is a fantastic video, and really clever stuff - I went for option 5, and I only wished you'd mentioned the prescribed particulars as I'm a bit puzzled as to what it means and what to put there.

[@note-uq2ek]

Great information

[@gitingrewal2204]

Thanks, very informative!

[@tamara9422]

Great Video! Very informative!

[@mrcmaths4613]

Fantastic stuff thanks.

[@ImmersiveExperiences]

Extraordinary....got to protect our kids from the Milkman! I have set up a LTD and now know how to start my investment

[@MahendraPatel-xb1sn]

Thank you Ranjan

[@stevens-buk6830]

Ranjan, so glad to have your video and channel. Just at the right time for us. Thanks to Mark too. S

[@spaceman6215]

Good! Some good solid information and help. The problem with unlimited information at your fingertips is knowing what questions to ask. Now I finally have more questions to ask and to learn!

[@Ron-No1-Tips]

Great video.

[@frankli7848]

very useful information

[@jazzwonderboy]

Fantastic summary at just the right pace - only had to rewind a couple of times. I run as company so knew some of this like a and b shares but still learned loads. Particularly interested in LLPs which it seems keep your options open. I disagree slightly with your opener though in that, if one owner is a lower rate tax payer and you’re only buying one or two BTLs, section 24 doesn’t make an impact and it is cheaper and simpler to buy in your own name(s). Mortgages are 1-1.5% cheaper, there’s no risk of double taxation (corporation followed by dividend tax), and you get a 12,500 capital gains allowance each. For small fry (most landlords) that is fine. If you’re more ambitious, or older, yes I see the argument for LTD company of course. Hence my interest. LLP with option to incorporate later sounds the way forward. Thanks chaps.

[@SM-sg4md]

Thanking, a really informative video, well worth watching a few times especially the LLP and Smart Ltd sections.

[@ranjanbhattacharya-succeed7617]

Much appreciated. Thank you

[@mohammedmoied8838]

Very useful comments

[@thehakbar]

As usual excellent piece of information for free which costs a lot from a tax specialist. Thank you Ranjan.

[@omarqasimiqbal]

Thanks for that video. Something I discuss with many of my clients but the key is to get the right advice from qualified people. I am surprised that Mark has not heard of the term FIC (Family Investment Company)? It is the go to structure for most accountants/tax advisers. Things to be aware of is the tax pool within a discretionary trust, affordability of the loan interest repayments and also your children might actually want to own the assets rather than be loaned them.

[@ajayprab1]

Excellent video! well done

[@ranjanbhattacharya-succeed7617]

Glad you liked it! Me & Mark JUST released a new one!

[@Theglobalpeace]

Great video Ranjan. I wish I had come across to this info at least a year ago. Can you start LLP with one resi and one commercial property?

[@vwnige]

great video, you need to do more videos with Mark.

[@ranjanbhattacharya-succeed7617]

The next one on from that one was kzbin.info/www/bejne/gni0eJulm9SFeZo (& more coming)

[@vipinshah4241]

Thank you for sharing this video for free its a great help

[@ranjanbhattacharya-succeed7617]

You are very welcome

[@Meowscales_Playz]

Great video. A lot of useful information

[@ranjanbhattacharya-succeed7617]

Glad you think so!

[@asili2734]

Thanks for this great video, I've watched it 4 times over and over :) Few questions please: 1 - can you explain a bit about what you were saying about: "spend as much of your capital as possible while you're alive so no capital gains in the company's value"? you mean by spending it in buying more properties with the income generated by your current properties? or to pull it out with no tax as it was a loan to the company? 2 - can refinance money in personal name be used as a loan to the company?

[@chetnavoralia7795]

This is absolutely mind-blowing!. Can you buy the share or structure them as advised in this video if you have already formed a company? Thank you so much for such great content.

[@gabryos3807]

Subscribed

[@jackfordmac]

Great video, slightly upsetting as my wife did run away with both my gardener and my milkman 😔

[@familiafirpo5749]

Thanks, excellent video! We’re incorporating using the smart structure but our accountant raised concern that we may not find lenders willing to lend to a limited company with children as shareholders. We’re only giving 10% to each child (2 children in total) with no voting rights. Can this really be a problem to get BTL mortgages?

[@Asif24960]

Would be great if you did an update of this just in case things have changed

[@anaypatel4027]

Really interesting. How can I move properties from sole ownership into either ltd or LLP's??

[@morginafinney5318]

Sell it to your company

[@jennyli5598]

Hi, very good video, any suggestion on form LLP between a person and the person’s limited company? Thanks

[@jitendrashakya5122]

Hi Ranjan Thanks for sharing your excellent knowledge with us. Can you please suggest how do we build portfolio for our teen who are just 18. What will be best approach? Thanks in advance Jit

[@TheBrick2]

What about development vs buy to let? Do you run a separate maintenance / development arm that does the work?

[@willb249]

excellent content, thank you! Any advise for me? I want to get started in London accruing capital to invest by doing assisted sales.

[@hakimvlogs6579]

Wow lol! Option 4 sounds amazing and it’s so bloody clever. Quick question... What about you invest 50/50 with a partner and he has 3 kids and You have 2 kids. Do you make B & C shares? Also can you give the B shares away to yourself? The reason I ask is what if I want to set a company up like this 4th option, and the first or second property I do, I want to flip instead of rent out, and I want to re invest the deposit and the refurb money but enjoy the profits for example.. how would I go about that? I’m a day away from setting up my company and I want to get it absolutely right from the beginning so please help by answering this. The auction is on Wednesday so I’ve not got long.

[@rajivvashm6046]

great Video- so How do I get started ?... set me up the SMART company at minimal cost..... Minimal cost because I'm yet to make the first purchase.

[@ranjanbhattacharya-succeed7617]

👉Baker Street Property Meet Book Your Tickets For This Months Event: www.bakerstreetpropertymeet.com/ Join us and 300 property investors at the UK's Largest Property Networking Event, on the last Wed of each month 👉Instagram: instagram.com/ranjanproperty/ 👉TikTok: www.tiktok.com/@ranjanproperty 👉LinkedIn: www.linkedin.com/in/ranjanproperty/ 👉Ranjan's 8 Week Commercial Property Course: www.succeedinproperty.com/workshop 👉Ranjan's 12 Month Commercial Property Mastermind Programme: www.succeedinproperty.com/mastermind

[@pcbounces6816]

Thanks for the video, some feedback if you don't mind - it will useful for the audience if you would put next time some visuals, figures and structure drawings, etc. on the screen while talking with more detailed explanation and please please slow down...otherwise it all gets muddled up and confused for everyone.

[@keithstewart511]

useful - i bought two properties for cash in my name.can i set up a company with them?

[@timwells3056]

Hello great video ! I’m 63 have a property with 3 flats and a shop (in my name ) ! How can I change the building into a limited or Llp without getting clobbered in capital gains ? Or have I left it too late ? Property worth over a million with £250,000 mortgage. Also is there accounts who specialises in rental my accountants I think do not know too much about it and possibly not giving the correct advice .

[@emadbarday5474]

Great learning ! For the last option - does it work if you want to withdraw a salary for yourself ?

[@Property_118]

Yes it does

[@akay8235]

Great and highly informative video Mark as usual ... as smartly presented by Ranjan of course... well done to both of you Just a couple on the discretionary trust for Mark please... when it comes to lending a child money to buy a house from growth shares.... How will the shares be liquidated to lend the child say 1 million out of say 5 million (assuming to be the total trust growth at that point as an example) In other words how will it actually fund or make funds available to lend the money (to the child to buy a house)? Will it withdraw cash from the company sitting on balance sheet (previously lent to it by and owed to the deceased) or sell its growth shares? Assuming that the trust will not be able to sell part of the growth shares or in fact borrow against them? will it need to sell all the shares and liquidate the whole trust to enable this child lending; and if so will then the 10 year trust tax start to become payable at that point and briefly where; can it (the trust) be administered overseas; Thank you

[@richardburke952]

did anyone answer this question ?

[@thebeachcybercentre2542]

great info....how much approximately would it cost to make the transition from sole ownership to Ltd using professionals?? Is it a percentage of the estate? Would be very interested to know

[@alisonnorcross951]

I m thinking the same and whether worth it.

[@jaspindo9050]

How to change the structure of the business from property on personal name to Limited company?

[@thundercata2961]

Great advice there Ranjan. I wonder if for example I could buy a residential property within a limited company? I ask because I currently own a flat which I'd like to keep and buy a house to live in. Should I buy the house in a limited company or are there downsides?

[@bindurao6173]

Ranjan, very nice video. Suppose I lend to my co, am I allowed to do so without charging any interest? If I have to charge interest, then it may backfire, becos, the interest will be added in my income. It will be all the more bad when the property sometimes does not give much returns and I still have to charge interest. Shall be grateful for a reply.

[@ranjanbhattacharya-succeed7617]

That is true. (But there is a personal allowance where basic rate tax payers can eran £1000 interest tax free pa and high rate tax payers £500 pa

[@healthiswealth8153]

I have a day job and I'm a 20% tax payer. Would it be advantageous to use a limited company to build a property portfolio but not take any income/profits until the company hits £50k/yr or makes more than my main income and I can give up the day job?

[@jdaviesttm]

Am I right in thinking that the only drawdown to you personally is the repayments of the loan you originally gave? Is there no way to have this same smart structure with all the A,B,C + Discretionary trust share benefits while also being able to access the capital the company generates?

[@jazzwonderboy]

Give yourself some B shares? Make some D shares, which have options to buy B shares? The mind boggles. If Amazon and Starbucks can do it (by renting themselves Ip rights from Holland in the latter case) perhaps anyone can.

[@christinewatson8679]

If the B growth shares increase in value due to capital growth can this new capital growth be used to enable a property to be remortgaged in order to borrow more funds to buy more properties? If these B shares are separately placed in a discretionary trust can these growth shares stand on their own and be used as a deposit for the purchase of more properties?

[@ranjanbhattacharya-succeed7617]

Theoretically yes but in practice you will struggle to find a lender who will accept the shares as a deposit.

[@jenibear06bear78]

I am looking at selling my latest property to free up cash in order to purchase another investment property to improve and sell again. I need to do this a number of times over the next few years. I suspect a limited liability company is something I should set up, and then use my investment of £200,000 as a directors loan. I wish I could find somone to advise me on this. Thanks for the insight thus far. ♥️

[@jazzwonderboy]

Try Neil Wilson accountants in Torquay. Very good at that sort of thing.

[@adielstephenson2929]

If you take the money out of the company that you originally put in, you obviously need to spend it before you die, otherwise there'll still be IHT to pay on the cash. My dad did that, thinking he was going to have plenty of time to spend it, then died, at which point I had 125k IHT bill to pay.

[@juliemccracken4113]

If you loan the company money in the first place, does this put the balance sheet in a negative position (it owes more money than it is making in profit in the first few years)? If so, will lenders still lend for mortgages - as it may look as if the company is making no profit.- in fact it is making a loss, when you take into account your start-up loan.

[@Property_118]

No

[@DeviousKeys]

Mark Alexander Property118 TV just to clarify which part of the question are you answering no to?

[@Property_118]

Directors/Shareholders loans do not affect the profits and loss of a company. Lending will always be on merit and in accordance with lenders criteria. I have never known a lender to decline lending based on Directors or shareholders having made loans to a company

[@DeviousKeys]

Mark Alexander Property118 TV thanks for clarifying and for the quick response, much appreciated

[@hakimvlogs6579]

Ranjan my accountant has told me I can’t use business asset roll over relief to defer CGT because HMRC don’t class being a landlord as a trading business. Since then I have also read this somewhere else, can you please clarify this or shed some light on it because from your other video/s I was under the impression that I could use Rollover relief to defer CGT

[@Inheritancetaxadvice]

For info only - People have to make sure thier property business is registered as a partnership first ( husband and wife is fine). They have to make tax returns as a partnership for 3 tax years. They then roll the partnership into a Limited company ( preferably a Family investment company). You may need to rethink your accountant??

[@hakimvlogs6579]

Bluebond Tax Planning Bluebond Tax Planning its already in a limited company .. I have taken Ranjans and Marks video on board as I’m a fairly new/young investor (25 years old) and opened my new company as a limited company with a different accountant than who first advised me that I won’t be eligible for rollover relief.. however I still want to know if I will be..? Also I want to know if I give away future growth of B class shares to my partner (as I don’t have kids yet/newly married) does this mean I can’t benefit from future growth ? As I’m still young I’d like to enjoy profits too.. Please Ranjan answer this or even Mark or the other Mark.. or Andrew haha (I think his names Andrew) or evening you who’s replied to this comment sorry I’m not sure what your name is..

[@hakimvlogs6579]

Even you *

[@Property_118]

You accountant is wrong - here’s a link to HMRC’s own internal manuals www.gov.uk/hmrc-internal-manuals/capital-gains-manual/cg65700#IDAJSJOC

[@barakharizi2351]

Great Video Ranjan! I'm a property investor from Israel who owns one property in the UK under my own name. I am now planning my next property purchase using a mortgage, which I also initially thought doing so under my own name, to enjoy the personal allowance benefit but now I'm not so sure. Does this also applies for investors like myself? and if so, would be right, to go for a limited company, given the fact I'm planning to grow my property portfolio in the UK over time. Thanks in advance!

[@studyinginUKandUSA]

Barak! let's discuss soon

[@Property_118]

It’s impossible to say without completing the consultation process - please see www.property118.com/tax/

[@asili2734]

@@studyinginUKandUSA @Barak Harizi would love to hear how you've decided to go. Thanks Asi

[@knownsensesocialmedia7618]

How do you tax efficiently transfer properties from personal name to Limited Compnay?

[@ranjanbhattacharya-succeed7617]

do watch videos in our property tax playlist: kzbin.info/aero/PL2qbo6eRT_4pBkUJAYPApu1B8qrMSSqLR

[@freespirit7010]

If I were to lend say £180,000 to my family investment company, what would happen when I pass away and the directors loan is still outstanding? Is this added to the value of my estate?

[@jazzwonderboy]

In short, yes. What they’re saying is you can give away the future growth. You can’t give away the original 180k (or you can I think, but there are tax implications). There’s suggesting you lend the 180k, the company invests it, any growth stays in the company’s b shares, but meanwhile, some or all of the annual profits are paid back to you to repay the 180k you are owed. The company pays tax on the profit but you don’t pay tax again on the loan repayments. It only works if you live long enough to spend the 180k on nice things! Also, inheritance tax only kicks in over £1m for home owning couples, so it’s not a common problem to deal with...

[@xavq8395]

It’s great but they charge thousands and a consultation fee. How can people who are breaking into the sector with limited funds just spend a few thousand?

[@hakimvlogs6579]

Ranjan.. my question is what if you want to benefit yourself from the capital growth let’s say in 5-7 years (im still young 25) by doing this does it mean I can’t benefit from the B shares in 5-7 years if the property goes up by £40k ?

[@Property_118]

Not necessarily

[@richardwills-woodward5340]

Just read some nasty information on the 'tax pool' liability after dividends are given out to beneficiaries from the trust structure. Always taxed at 45% net. So any dividends taxed at 38% to the trust incur tax on the beneficiaries not of 38% but of a shock tax bill paying the rest of the tax owed to 45% of 100% of the would be amount that is required on paper to receive the sum they received. The beneficiaries still have to pay any outstanding amounts between the trust's tax and their 45% tax rate. Trusts only really have benefit for loans to homes and tangible assets but have little use in monetary terms it appears?

[@Property_118]

Thank you for your comment. It is for these reasons that professional advice must always be sought, because a little knowledge badly applied can result in a much bigger problem than one started out trying to fix.

[@Ron-No1-Tips]

Can your own property be part of a limited company?

[@bahadurrandhawa8673]

CAN YOU RECOMMEND ANY ONE WHO CAN INCORPORATE MY PROPERTIES INTO A LTD COMPANY for tax planning.

[@tomatobrush3283]

Is it a good practice to create a different limited company for each property? What are the positive and negatives of buying more than one property in the same limited company?

[@jamessnelling]

Simon TV good question!

[@Inheritancetaxadvice]

No Unless you have different partners in the company I dont see any need for a separate LTD company for each property. In fact HMRC would not like it as you are running the same "trade" in separate companies. They don't like it because some people try to do this to avoid having to become VAT registered. Consider running it as a Family investment company as you can make the rules of the company bespoke and use it for IHT mitigation too.

[@rajuthanki5849]

If you purchase one property per Ltd company then when you want to sell, you sell the business thus avoiding property stamp duty. Am I correct?

[@tomatobrush3283]

@@rajuthanki5849 From what I found on the subject it seems best to separate your buying in to one limited company and your operations in to another. Also putting different types of properties in to different limited companies also seems ok. Like have a HMO limited company and a commercial property limited company. I am not too sure on the selling of a limited company but I have seen a few for sale like that and I think it does avoid stamp duty for the buyer, not sure how that benefits the seller though.

[@yiti5507]

we use Subtitles and watch the video. all subtitles is top up the words, doesn't look nice.

[@tamasshewry6220]

This video is extremely confusing and badly structured. I have more questions after watching it than before.