Should You Buy a Property in a Limited Company in 2024?

Рет қаралды 46,669

Күн бұрын

Is it best to buy a property in a limited company or your personal name? In this video, I walk you through the best strategy to determine whether it's better to own rental properties personally or through a limited company, taking into account various factors such as taxation, cash flow, and long-term investment strategies. This is not financial advice and you should always consult with financial and tax professionals who can provide the right insights to specific situations.
Ultimately, the decision to own rental properties personally or through a limited company depends on individual circumstances, including the size of the property portfolio, tax implications, cash flow considerations, long-term investment strategies, and risk management preferences.
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00:00 - Introduction
00:18 - Calculating Tax in Personal Name
03:51 - Calculating Tax in a Limited Company
06:09 - When is It Better to Buy in a Company?
09:12 - How Much Does It Cost to Set Up a Company?
09:26 - WARNING: It's Not That Simple...
11:45 - Why You'll Lose Money if You Buy in Your Personal Name

Пікірлер: 247

@samrajsingh1965 Жыл бұрын

Bro, I just want you to know I really appreciate your videos. First KZfaqr I've seen actually going into the details, and being UK focused. Thank you for your work. Wishing you the best success.

@ThatAhmedKhan Жыл бұрын

Glad I could help! Appreciate you here, too!

@prashphoto Жыл бұрын

Agreed, and well said!

@Smithb83 Жыл бұрын

Agreed, great video!

@Lemxns 10 ай бұрын

I love that the video jumps straight into numbers and examples. No long introduction or unnecessary filler. Perfect!

@SheCitrine Жыл бұрын

As a visual learner its amazing to see the calculations on paper ❤ can't thank you enough. Keep up being awesome

@ThatAhmedKhan 11 ай бұрын

Happy to help!

@rajjai 7 ай бұрын

I haven’t even finished the video yet and it’s already the best I’ve watched on this topic. Thanks for being so generous with your knowledge and breaking it down in the way that you do

@kau54r Жыл бұрын

The additional tax rate bracket is now £125k and not £150k. Also your personal allowance reduces by £1 for every £2 above £100k. If you’re a higher earner, it makes sense to put the property into a Ltd company.

@Ritzz45 Жыл бұрын

100%

@ChrisLee-yr7tz Жыл бұрын

Not necessarily. It depends if you have any loan interest and also if you need to take the money out.

@GoGetItPeriod Жыл бұрын

Ahmed, thank you for putting out this video. I've been searching for a clear breakdown on this subject and you summarised all the points I was looking for perfectly! You've earned another sub

@ThatAhmedKhan Жыл бұрын

I'm glad you like it! Thanks for the sub bro.

@tomrowlands1661 Жыл бұрын

This is a brilliant video and exactly what I’ve been looking for. Thank you!

@ThatAhmedKhan Жыл бұрын

Glad you liked it!

@johnyramos8527 2 ай бұрын

Thank you very much !nobody makes this info so clearly ,you definitely deserve all the success 🙏

@mahadomar9065 4 ай бұрын

You are absolute incredible. I love your practical approach and numbers prespective

@oladolayemi3688 4 ай бұрын

Well articulated and straight to the points, an aspect of property investment i was looking to understand as a beginner - Nice one👏

@scottmonaghan4253 7 ай бұрын

Watched a few videos on this subject.. this made it easy to understand

@ruhul969 4 ай бұрын

Excellent video. Thanks.

@bhumigat2349 5 ай бұрын

Never ever seen as good as this video on this topic bro, much appreciated ❤🙏

@ThatAhmedKhan 5 ай бұрын

I’m glad :)

@_CallumRichards Жыл бұрын

Great vid, cheers.

@mizstermethod 2 ай бұрын

Elite and World Class video!!!! Super clear and straight to the point!!

@stephenllewekyn706 6 ай бұрын

Fantastic video and recently subscribed. Me and my wife have gone with a limited. She's an accountant. And we can get tax breaks on a room being an office in the house and also meals and fuel on visits to viewings.

@shraddhagurung9689 Жыл бұрын

Thank you Mr Khan for all videos … its educational

@ThatAhmedKhan Жыл бұрын

Glad you found them useful!

@44dhm Жыл бұрын

Such a useful video! This subject has been on my mind for awhile and you helped me understand the pros and cons

@ThatAhmedKhan Жыл бұрын

Glad it was helpful!

@kyle286 Жыл бұрын

Solid content. Subscribed

@ThatAhmedKhan Жыл бұрын

Thanks bro!

@VN92Dragon Жыл бұрын

Crazy how informative this video is. You got a new subscriber! You explained it so well!

@ThatAhmedKhan Жыл бұрын

Thanks and welcome!

@henryroser8471 Жыл бұрын

Great video, you’re really good at what you do and teaching thank you

@ThatAhmedKhan Жыл бұрын

Glad you liked the video!

@TokShogun Жыл бұрын

Interesting angle! I guess also worth mentioning that interest rates are a bit lower in the personal name and you can get money out of a ltd in form of a directors loan but general rule of thumb applies if you stay 20% go personal if you are 40% go ltd?

@Ozy84 Жыл бұрын

Loving the videos they’re very in depth and informative

@ThatAhmedKhan Жыл бұрын

Glad you like them!

@mattcadman5723 Жыл бұрын

Great video, love how clear it is and how you explain it without an agenda

@ThatAhmedKhan Жыл бұрын

Thanks bro!

@shumatsuopost Жыл бұрын

I found it interesting to learn about the potential downsides of buying property in a limited company. It's important to consider all factors and potential risks before making any big financial decisions. Thanks for sharing this informative video!

@ThatAhmedKhan Жыл бұрын

Well said!

@paulmaricelle3569 Жыл бұрын

Hey, I just discovered your channel a few days ago and you're doing amazing job ! Keep on going, this is truly inspiring and valuable content.

@ThatAhmedKhan Жыл бұрын

Thank you! Will do!

@faceoff1ful Жыл бұрын

Wow, went through the details really well, thanks for making me understand better!!

@ThatAhmedKhan Жыл бұрын

No problem!

@simoncrehan7779 Жыл бұрын

such a clear explanation. Thanks.

@manolotee3655 Жыл бұрын

Really interesting. Thank you

@steveshea392 Жыл бұрын

Such an informative video Ahmed. I have 3 BTL in my personal name. I didn’t know that when pulling money out by remortgaging that you pay tax on it in a limited company. 🤯 I have just subscribed!

@mumtazsanni2259 Жыл бұрын

Great content Ahmed. I just came across your video last week when I was looking for SA related content and I must say, I learnt more on your video than I learnt from the paid course I attended. I am about to take up a property for SA by next week in Peterborough and I have signed up for your mentorship programme but I'm yet to get a response. Great job bro

@33trivedi 11 ай бұрын

hi ahmed, love the simplicity and explanations. im curious to know if you have any advise on best methods of transferring properties from personal assets into a ltd company.

@Kamaltweet Жыл бұрын

Also, in limited company the solicitor fees and interest rates is higher so that must also be taken into account.

@milanmagar2775 Жыл бұрын

This is such a great video in a very details. Appreciate your effort ❤

@ThatAhmedKhan Жыл бұрын

No problem! Thanks for watching bro

@user-te1le7ck6b 9 ай бұрын

ahmed i watch a lot of property videos and your simple non rambling explanations are spot on. Just dont forget LTD also is better for things like deaths etc , short term pain long term gain

@FameAndFortune1 Жыл бұрын

Probably the best property tax explainer video I have ever seen!! Well done man!

@ThatAhmedKhan Жыл бұрын

Appreciate that! 🙏

@ameenr9129 Жыл бұрын

Great content, thank you

@ThatAhmedKhan Жыл бұрын

Glad you enjoyed it

@alizaman8783 Жыл бұрын

Great video, you havnt mentioned ditectors loan which is presumably the deposit.

@RD-qp3mu Жыл бұрын

Well explained.

@ThatAhmedKhan Жыл бұрын

Thank you!

@Stephen-gn2br Жыл бұрын

Depends if the limited company which owns the property is in the Cayman Islands though 🤷‍♂️

@jaiminpurohit9968 Жыл бұрын

Great video Ahmed 👏🏼

@ThatAhmedKhan Жыл бұрын

Thank you 🙌

@waqaszzaib Жыл бұрын

New to the channel, like what you are doing. Just a note that its better to have a LTD company in terms of inheritance tax. Otherwise you'd get slapped with 40% tax.

@ThatAhmedKhan Жыл бұрын

That is a benefit. I’ve mentioned this in the calculator

@joelowrey9037 11 ай бұрын

Subscribed! Great video! Where can I find the comparison calculator you was using

@ThatAhmedKhan 10 ай бұрын

Here, linktr.ee/ahmedkhann

@fernandoraymond Жыл бұрын

Good tips.

@ThatAhmedKhan Жыл бұрын

Thanks mate!

@Navap190 Жыл бұрын

Depends on your income

@TheUntitledMisc Жыл бұрын

Amazing Video mate! Please do another comparison when someone sets up a property management company rather than a limited company

@ThatAhmedKhan Жыл бұрын

What do you mean by this sorry?

@diandrra1 Жыл бұрын

Great video! I heard recently some advice regarding buying SA properties in own name due to tax benefits. Since I have just got my mind around buying in a company, I am not that comfortable buying in my personal name. What is your view regarding buying BTL and SA properties in the same company?

@rezahooda3888 Жыл бұрын

Well explained Ahmed. Better than many tax advisors 😅👏👏

@ThatAhmedKhan Жыл бұрын

Glad you liked it

@jacksummers3918 Жыл бұрын

Thanks for the great video! What should you do if your base salary is already within 40% tax?

@rikardsaje Жыл бұрын

Go limited.

@ThatAhmedKhan Жыл бұрын

Most likely Ltd will be better for you but speak to an accountant just to doublecheck based on your situation

@khagendrasingaklimbu7910 Жыл бұрын

Hi Ahmed, do you mean even other than your principal residence BTL bought in your own name and when you sell in the future you do not have to pay tax for capital gain?

@Lemxns 10 ай бұрын

What about if you’re already in the 40% income tax bracket before you have any property? Can you do a worked example of this? Great video!

@rabisultan Жыл бұрын

From my understanding the benefit of buying as a limited company has more to do with long term IHT planning and not the year to year tax payments

@ladyfitness67 Жыл бұрын

Thank you 🙏🏾

@ThatAhmedKhan Жыл бұрын

No problem!

@mohammed-wt7nt Жыл бұрын

Can you make a video on pdr, converting office space into residential

@ant8066 Жыл бұрын

where can we get the link for the calculator at th start of the video? great video btw

@ThatAhmedKhan Жыл бұрын

Here you go www.propcalc.co.uk/

@jonwinn39 Жыл бұрын

Great informative video. I was wondering how the comparison would be if instead of paying a salary to the limited company owner (reducing profit to zero) instead they were paid through dividends?

@ThatAhmedKhan Жыл бұрын

But then you would have to pay corporation tax

@coolmonkey619 Жыл бұрын

But in the first example its better because accounting fees is so high only

@shaundodson7852 Жыл бұрын

The capital gains tax difference (personal vs company) might be worth considering.

@ThatAhmedKhan Жыл бұрын

Correct

@thushanbalasingam8285 Жыл бұрын

However there is the fact you can withdraw money in the form of a directors loan if the investment was loaned to the company from your personal account. This will be more tax beneficial than the calculations you have shown. However, still a great video and great information

@ThatAhmedKhan Жыл бұрын

Yes but you can only do that until the loan is paid back in so I did not want to include that in the calculations as that is not viable in the long-term

@abdallahel-far3864 Жыл бұрын

Thanks for the great info. Can you teach me the property business??

@ThatAhmedKhan Жыл бұрын

You can check out my free courses here, linktr.ee/ahmedkhann

@taitantran5868 Жыл бұрын

You should open courses for people my brother.I will definitely be first in line. Just made a confident decision on a house after watched your video Keep it up brother .appreciate it

@ThatAhmedKhan Жыл бұрын

You can find my free courses here: bit.ly/Ahmed-Khan

@haroonkhan8690 Жыл бұрын

Ahmed, would you still recommend serviced accommodation for a revenue stream?

@ArchDuke_JD 9 ай бұрын

if I am an international property buyer and will be buying properties with full cash payments (no mortgages of any kind involved), should I buy them in my name or LLC you think? I am considering to buy multiple ones for rental purposes so they can supplement my annual expenses while living in the UK...thanks for the help.

@andrewfallon2719 4 ай бұрын

But when you factor in 33.75% dividend tax for higher earners.. even in a Ltd company, you’re still paying over 50% tax… My question is how can anyone make any money under these circumstances ?

@celiahall6168 Жыл бұрын

So the £75k you pull out when you remortgage is still tax free and no CGT when you sell? Can taking out the £75k also help mitigate GCT later on?

@petsloveonly Жыл бұрын

Yes also u can buy with a sipp and then it's tax free cos its pension proof 😮🎉

@owenaylward Жыл бұрын

One of the other things you need to take into account is Directors Loans, how you can loan the company the money and pay it back once you've received enough rental, With no tax implications as all the investments into the property you can class as a directors loan.

@ThatAhmedKhan Жыл бұрын

Yes but that only works until you pay off the loan. I want to build a calculator which allows for the long-term

@owenaylward Жыл бұрын

@@ThatAhmedKhan let’s say it’s a £40,000 property and it brings in £400 a month That’s going to take a while to recoup that loan that you put in but I completely get it’s for calculator purposes None the less great video 👌

@craigjames8026 Жыл бұрын

The cheapest monthly rate for an accountant I could find was £100 a month for my limited company 😭 so it would be even less profit

@edwardhughes1075 Жыл бұрын

In the example of taking equity out of the property, you had a £75K loan against a £100k property, after 10 years the property is worth £200k so you remortage at 75% LTV and get £150k of which £75k goes back to the original lender to settle that mortgage and £75k can be taken tax free - which is great. However, you're surely then servicing a mortgage that is double what it was and then likely putting yourself in a corner in terms of profitability/tax liability, with the initial example of HMRC seeing your profit as exclusive of any mortgage deduction other than that 20% relief? Maybe I've missed something here - hope I have to be honest?

@cavidn7856 10 ай бұрын

I wonder what will calculation look like if you are already in 40% bracket and the interest rates are high as they currently are, then llc makes sense from property 1 I guess

@omsval1485 10 ай бұрын

Realistically how would you spend or access the money with in the limited company bank account

@markjenkins6935 Жыл бұрын

I have in the last 12 months purchased 4 properties in my own name to add to the 4 I already owned. This was a decision I made to carefully just about stay within the 20% tax bracket (I have no other job income) many video I have watched have suggested that I made the wrong decision but after watching your video I am more confident that unless I buy anymore only then will I need a LTD company structure as I would be in the higher tax bracket. I also personally think that the government will change the rules again once there is enough people suck more money out of in LTD company structures. Thank you so much for this great video Ahmed😊

@Kazi2812 Жыл бұрын

My thoughts too. I lose about £500 a year on my BTL in my personal name, but can't help think that the government will absolutely go after LTD company property wrappers next.

@ln5747 Жыл бұрын

You made the correct decision in my opinion. If you have no income you're far better buying in your own name and using that as your income in the 20% tax bracket rather than all the hassle of tying up in a LTD company for probably no financial gain.

@ThatAhmedKhan Жыл бұрын

There are too many people giving one size fits all advice when it is never the case. Well done for sticking with your decision

@JohnDoe-eb1ni Жыл бұрын

You cannot raise the rents now 😅

@davidcalvert-smith4633 Жыл бұрын

The average rent of each property is £520/month after repairs? That is very cheap I assume they are north-north!?!

@terezahorka9125 Жыл бұрын

Great to see someone talking about the UK market! Do you know if it's a difficult process to move the property from personal name to a limited company once you pass the income threshold? Also, how about capital gains tax? Is this more costly in personal name or limited company? Many thanks 😊

@andrewharrison3888 Жыл бұрын

No it’s not difficult, speak to 118 property, they are experts in advice on this 😊

@liam-james Жыл бұрын

Can you point in the direction of a place I get get limited yearly accounts done for £500 a year please. Much appreciated. Great video

@ThatAhmedKhan Жыл бұрын

Try these guys: bit.ly/osomenotion

@jovsta Жыл бұрын

In limited company you get more control and can decide when and if you want to take money out. When purchased a property under your name, you have not control.

@ponyboy1664 Ай бұрын

Thank you for an easy to follow guide. Your calculator webpage isnt secure though, so wont open in my browser, which is a shame. But a great video never the less.

@ThatAhmedKhan Ай бұрын

Hmm I’ll work on that

@shahidahmed7511 5 ай бұрын

Where does national insurance play into this?

@hbchohan7886 Жыл бұрын

My God - you are such a genius - How does your mind work - Truly a Genius. What is your IQ MAN!? I am sure there is no calculator for that one! Your IQ must be a very large number and I bet you - you are a chess player can solve the Rubbicks Cube and you find Sudokus easy to solve. Wait a minute you are not a professor - Are you? Well you should be. Thanks for all this flawless education.

@ThatAhmedKhan Жыл бұрын

Appreciate your message! Thanks for watching!

@user-im4mv6bd2m Жыл бұрын

11:00 You would only pay that large sum of tax if you take it out, you can keep it in and buy other properties and not pay tax @Ahmed Khan

@kostasp8604 2 ай бұрын

Exactly. Very important point he missed Its one of the biggest reasons why people invest through Ltd's

@iangreenstreet1407 Жыл бұрын

Good video- what about the cost of a commercial loan vs BTL Mortgage? - also costs to move properties from personal to ltd company ownership?

@JohnDoe-eb1ni Жыл бұрын

Stamp duty

@danaali7940 Ай бұрын

i dont that understand that 30k can you please explain ? where does come from?

@midasrashid 8 ай бұрын

Ahmed - if you take into account dividend allowance, it makes it even more favourable to invest through a Ltd company.

@ThatAhmedKhan 8 ай бұрын

Yep correct :)

@zarshedkhan5827 10 ай бұрын

The compnay have to pay NI on the salary you are receiving from it

@toffmcman9505 3 ай бұрын

Hi please correct me if Iam wrong that 75k made in personal name it’s still subjected to CGTno doubt of that which is btw 18-24%

@ishmillionaire4672 Жыл бұрын

Thanks Ahmed. What if you have properties in joint accounts.... Then you can go upto 4 properties in joint names!!!! One of my friend had done this. And from 5th property they are buying in ltd company. Hope this helps too

@ThatAhmedKhan Жыл бұрын

Yeah that can also work

@sarahabe1221 25 күн бұрын

Could you not pay yourself in dividends?

@bgate1984 Жыл бұрын

Also- ltd company mortgage interest rates are also higher?

@Kazi2812 Жыл бұрын

Yes marginally.

@victornowhere Жыл бұрын

Tax on dividends is is much lower than 20%. Potentially 8%. You can deduct a lot of costs before you calculate tax. You have double tax allowance.

@shyamsuchak Жыл бұрын

Please help and suggest which lender provides company btl mortgage at same rate as personal btl. It will be very helpful to know such lender

@ThatAhmedKhan Жыл бұрын

Buy to let mortgages in a limited company are more expensive than your personal name

@benhaley9811 Жыл бұрын

This is verbatim what I need to understand

@Jeffybonbon Жыл бұрын

I am lucky 95 percent of my income is BTL and i have managed to stay as a 20% tax payer one day thresholds will rise sooner the better

@TheRichardgrime Жыл бұрын

Well if you owned your property in a limited company you would pay yourself by dividends. That is the advantage.

@nehornferdinando9849 Жыл бұрын

Great video Really appreciate it Is there any chance of getting an advice from you. I would like to know if I want to move a BTL property from personal name to LTD company: What would be the cost?

@ThatAhmedKhan Жыл бұрын

Most likely you will have to pay stamp duty

@nehornferdinando9849 Жыл бұрын

@@ThatAhmedKhan Are there any more costs? How hard is this.

@henrylarkins4119 Жыл бұрын

surely this just depends on how much you plan to scale?

@victoredwards3959 Жыл бұрын

Yes. As he said, if you are buying more than 2 or 3 properties, you are better off buying in limited company.

@henrybignell1737 Жыл бұрын

You earned yourself a subscriber, great content 🫡

@ThatAhmedKhan Жыл бұрын

Thanks bro!

@ConstanT1ne32 Жыл бұрын

Does it cost anything to transfer property from a personal name to a limited company?

@tubzattwood3915 Жыл бұрын

I’d like to know this, and the other way also

@leonjewells3626 Жыл бұрын

Have you had to get an "Energy Performance Certificate" for any of your properties yet. Can you make a video if you have. Thanks

@Kazi2812 Жыл бұрын

These are required for all rental properties, even now. You will fail to issue a section 21 if these are not present.

@Fresh-qc3zn Жыл бұрын

Could you not just take the money out of the ltd company as dividends at 8.75% tax as a basic rate tax payer? Making this comfortably the best option for paying the least tax?

@ThatAhmedKhan Жыл бұрын

A divided has to be paid from profits. Therefore you’d have to first pay 19% corporation tax and then the 8.75% dividend tax, which would end up being more than the 20% income tax.

@alz8166 Жыл бұрын

What if I’m not planning to take money out of the ltd company ?

@wenesze Жыл бұрын

You’d have to pay corporation tax which is 19%. Or u can reinvest that money into another property/assets/business expense and keep ur profits low and pay less tax

@jamesmcdermott7354 Жыл бұрын

A limited company can't deduct mortgage payments from rental income only interest is deductible. Also, the 20% relief only relates to interest, not the total mortgage payment.

@ThatAhmedKhan Жыл бұрын

This video and calculator is for BTL properties and pretty much all BTL properties are on interest only mortgages so the calculator should hold but yes fair points