Anonymous

September, 2003 — Irish Permanent has introduced a new mortgage especially for borrowers who want to channel their property income through a limited company to save tax.

The Limited Company Mortgage allows a property investor to borrow up to 85% LTV via a limited company. The product is a flexible tracker at Bank Base Rate +1.24% that is currently offered at 4.74% with no redemption penalties. There is an uncapped 0.5% procuration fee on the product.

Irish Permanent does not require individuals to set up a separate limited company dedicated solely to property investment to take advantage of the product. It allows applicants to use companies that already exist and may be being used for other purposes.

The lender, which has its UK offices in Hammersmith, London, says that the new launch is intended as a stimulus to increase the number of borrowers currently using Ltd companies. Having a Ltd company allows property income to be subject to Corporation Tax rather than Income Tax, which is generally significantly higher.

Mike Healy, Irish Permanent Senior Manager, said: “We hope that this product will make it more of an attractive proposition to channel property investment through a limited company. It is amazing really, landlords are eager to remortgage to save themselves a half a percent, but they miss out on the huge savings they could benefit from by going down the limited route.”

Irish Permanent advises all mortgage applicants to seek the advice of a tax adviser or accountant before borrowing through a limited company.

Release date: September 3, 2003

Press Contacts
Mike Healy, Irish Permanent, tel:020 8748 0258
Cormorant PR, tel: 01883 371753

Notes for Editors

The key advantage for borrowers is that rather than having to pay income tax, they can often cap their tax liability at the 19% Corporation Tax rate. This can prove to be of considerable benefit with a growing portfolio of properties. The savings can run into tens of thousands of pounds if the investor is used to paying Income Tax at the 40% higher rate. Such tax savings can be reinvested by the company to fund the purchase of more properties going forward.

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