Today I have come across one of the worst structures implemented by an accountant for a BTL landlord I have seen. The client owns properties personally and he has been told to put all rental income through a limited company and then create a deed of trust as part of this process.
This documentation is not done correctly, so now the land registry, tenants and lenders think he owns them personally, HMRC only sees rent through the limited company and the deed of trust shows that he and the company own the properties 50-50!
As well as being in breach of his mortgage conditions, he can no longer refinance his BTL mortgage portfolio or buy any more property. What’s worse for the client is the accountant is a family friend, so I envisage many awkward conversations ahead.
Before you do any restructure I recommend that you talk to a chartered tax accountant who understands the property market and then once you have the options, either speak directly to your lender or a broker who understands the BTL market. You can find out how the lenders will view your options and you won’t lose sleep at night because of what your accountant has done.
We know what the lenders like and don’t like, so are happy to help you with your BTL mortgage restructuring plans.