In the budget on July 8 Chancellor George Osborne announced that the amount of higher rate tax relief landlords will be able to claim back will be gradually restricted to 20% by 2020. As a result a number of investors are considering doing so through limited companies.
Eddie Goldsmith, senior partner of Goldsmith Williams, said: “These changes announced in the budget were a bombshell ‘and we’ve received feedback that many landlords are now considering changing their business model. For this reason we’ve set up a new service to anyone looking to use a limited company in the transaction.
“Although the legal transaction is essentially the same whether an individual or a company is purchasing a buy-to-let property there are different considerations. Firstly greater due diligence is needed when acting for a limited company rather than individuals in property purchase.
“Solicitors need to investigate the individuals who are behind the company as part of their money laundering regulations. In addition lenders often require personal guarantees from the individuals behind the limited companies and perhaps most importantly any charge must be registered at Companies House within 21 days otherwise it may be unenforceable against the liquidators of the company.
“With all these additional aspects to consider it makes sense to work with a specialist solicitor who can ease the borrower through conveyancing with timely and proven processes and who is on the panel of the specialist buy-to-let lenders.”
