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 the rental income through a limited company and then create a deed of trust as part of this process.
Land Registry, his tenants and lenders think he owns them personally, HMRC expect the rent to go through his personal tax return but it’s in the limited company. Finally the deed of trust shows 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 an awkward conversation ahead.
Before you do any restructure I recommend that you talk to a Chartered Tax accountant who understands the property market and once you have options, speak directly to your lender or a broker who understands the BTL market.
You will find out how the lenders 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.