Why Set Up a Limited Company?

Why Set up a Limited Company?

If you’re already a British Expat Landlord -or looking to become one -it might be worthwhile looking at the benefits of taking out a UK limited company mortgage instead of purchasing the UK property in your personal name.

Buy to Let Tax Changes

With Buy to Let tax changes starting in April 2017 it might be the right time to buy your property in a UK Limited Company.


Mortgages for Limited Companies to British expats have been restricted until now as Liquid Expat has sourced and developed mortgages for limited companies which could mean that as a British Expat you might be eligible for a UK ltd company mortgage. With the advent of buy to let tax changes and other benefits such as mortgage tax relief means taking out mortgages for limited companies instead of your personal name allows you to gain the benefit of btl tax changes.


Here are some key points to consider why Mortgages for Limited Companies might suit you better.

Buy To Let Tax Changes are here to stay

If you directly own an investment property your rental profits are taxed at your personal income tax rate. Your personal allowance in 2017 – 2018 of £11,500.00 and with mortgage tax relief and btl tax changes it means you could end up paying much more tax.

Limited Company Limited Tax

In a Limited Company rental profits are taxed at the current rate of Corporation Tax so you will only be taxed on the dividends you receive over and above the current threshold of £5,000 in each tax year. As of April 2017 Tax on dividends will be charged at 19% reducing to 18% by 2020.

So by holding property in a limited company you can take advantage of the btl tax changes and save tax by retaining your income and not treating it in the same way as income tax where your tax rate could be as high as 40-45%.

Availability of higher borrowing amounts and Loan to Values

Borrowers for UK investment property will face stricter lending criteria when approaching buy-to-let (BTL) mortgage lenders in 2017. As of 1st January new regulations from the Prudential Regulation Authority (PRA) means that 125% rental cover will be insufficient. Several lenders have increased stress tests for personal borrowers to 145%, maintaining them at 125% only for those borrowing via mortgages for limited companies.

Keep More Profit in Your Limited Company.

New mortgage tax relief changes and btl tax changes to personal btl mortgages makes a limited company mortgage more beneficial as you can retain profits in your company and use the added profits to fund further portfolio growth.

As a director of a limited company you can decide when to distribute profits to shareholders so retaining greater profitability and liquidity in your company.

Efficient Tax Planning

If you want to transfer the properties to your family members in the future, it is simpler to transfer a limited company than individual properties or a group of privately held properties.

Any property owned by the company will be protected by the company and be protected be protected from Stamp Duty and Capital Gains Tax liabilities.

How do I set up a Limited Company?

Well it’s straightforward and it can take as little as 15 minutes to register a limited company online.

Before setting up a UK Limited Company check your eligibility for mortgages for limited companies.


Liquid Expat can guide you through your requirements for a Personal mortgage or mortgages for limited companies.

Available 24/7 Hotline +44 (0) 161 871 1216 or email info@liquidexpatmortgages.com today.


Seek independent financial tax advice. The decision to purchase or refinance as a company or a private individual depends on a range of factors, including the size of your portfolio, the level of anticipated profits from the investment and your income as a whole. Advice is essential before you make that choice.

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