Financing Barn Conversion in Limited Company

[TKC1]

 

Hoping to get experience of funding options with this context. We set up a Limited Company to purchase 8.5 acres of a now disused dairy farm. Site includes several barns including one which has gained full planning consent for a change of use to a residential dwellingl. 

 

I have had an agreement in principal via a broker for financing, but the cost of the finance is quite high. I'll do this if need be and switch to a buy to let mortgage once it's built UNLESS there are more conventional conversion/build mortgages you are aware of that might fund projects  operating within a limited company structure, which I gather is quite common now?

Edited October 20 by TKC1

[JohnMo]

I would be careful with the VAT implications to make sure you can claim it all back.  Was there a good reason to do limited company and mandatory annual returns, accountant ect? And higher company borrowing interest rates?

[nod]

I run a limited company and have looked into this While the vat isn’t an issue There’s very little you can do to sidestep paying 40% tax

[TKC1]

47 minutes ago, JohnMo said:

I would be careful with the VAT implications to make sure you can claim it all back.  Was there a good reason to do limited company and mandatory annual returns, accountant ect? And higher company borrowing interest rates?

Me and my wife have a limited company already. We have used profits from one company as an intercompany loan to our new company. Our plan is to run it as a business, short term let's, so it's much more efficient for us, even when accounting for returns, rates etc, to do it this way as it avoids income tax (as it isn't our money strictly speaking).

 

I may be unaware - what VAT implications are there you're referencing?

 

The barn which has just achieved full planning consent is in the curtilage of a listed building, so will be 5% VAT on costs. We also have a barn which we plan, as a subsequent project, to develop through Class Q. I wasn't aware that being a limited company affected the VAT on these projects. Any expertise or experience very welcome. 

[JohnMo]

Your 5% vat comes with a bunch of conditions, so check on HMRC website, some of the vat rules depend on if you intend to live in it etc. I may be wrong but worth 30 mins reading on HMRC website.