Stamp Duty, first and 'second' property, one is home, one is buy to let, what will i pay?

[SilveryWrath]

As an investment, i'm thinking of buying a property to let out over the long term. I already co-own the property i live in, i.e. the family home.

Like all btl landlords, I would have to decide whether to form a Ltd company or just own the property personally.

I'm in the process of making this decision but am stuck on the stamp duty issue: leaving aside for a moment that it's currently the stamp duty holiday, because that will probably be over by the time I do this, my question is this:

If I form a Ltd company, does the btl property I then buy through that company get classed as a first property, for stamp duty purposes? As it is the first property owned by the Ltd co? So not subject to the 2nd home doubling-up of stamp duty? Or is it still classed as a second property even if i own it via a Ltd co?

Also, if in the future I personally move house, selling current family home and moving to another, will that then be classed as a second/additional home for stamp duty purposes? (I'm thinking e.g. Getting older and downsizing to a bungalow or similar, not moving into the btl property)

I have googled but can't find the answers , thanks in advance.

The second home stamp duty tariff wouldn’t apply to the company, but you would need to contend with Annual Tax on Enveloped Dwellings (ATED).
You wouldn’t be able to get a normal BTL mortgage as many deals available to individuals won’t be available to corporates.
You’d also need to file yearly accounts with companies house and do an annual corporation tax return. You’d also need to figure out how to get the money out if the company (dividends probably) and would end up paying tax on these as well as the company profits.
Generally HMRC have put in place rules in recent years to make it very disadvantageous to hold residential property in a corporate. I don’t recommend it.

"leaving aside for a moment that it's currently the stamp duty holiday, because that will probably be over by the time I do this"

I've just bought a BTL property and the stamp duty holiday doesn't apply to second properties anyway, you still have to pay it.

I'd second the above advice, I have a really good and knowledgeable financial adviser who also lets property and his advice was unless you are buying, or planning on buying, several BTL properties, i.e. more than 3, and operating them as a business, the limited company thing is just not worth it and considerably more paperwork / hassle and there'll be enough of that anyway being a landlord.

The stamp duty holiday does apply to second properties, however the additional property surcharge is untouched.

As above, the ltd company route is fairly expensive. If you are in the higher income tax bracket it likely makes no sense. Do a quick Google for comparison calculators.

The mortgage interest fir Ltd companies is typically double that of personal btl, so that almost completely eats away at the gains made from just paying Corp tax. Then yes, you'll likely pay 32% tax on the dividends if you withdraw the income. Though I guess you could pay yourself as an employee, but then again if you have other income the tax on that will be high. You can write down more as tax-deductible under the ltd company structure, but again there isn't much in it.

I find the ltd company structure is best for those who aren't going to touch the income really, and instead they will make money from the growth in value of the property. That might be you.

Oh, yes, also easier to transfer ownership v cheaply under ltd company structure, eg to children so there is a gain in being clever about nit paying iht.