As we move into 2025, many UK landlords are asking, Can I switch to a limited company with BM Solutions? With changes in tax relief and evolving lending criteria, it’s no surprise that more property investors are exploring the benefits of limited company structures. If you’re currently with BM Solutions or Birmingham Midshires, understanding your options is key to making informed decisions about your property portfolio. In this guide, we’ll answer the most common questions landlords and brokers have about switching to a limited company with BM Solutions.
Can I switch my BM Solutions mortgage to a limited company?
Unfortunately, BM Solutions does not currently allow borrowers to switch an existing personal buy-to-let mortgage into a limited company structure. This means you cannot simply transfer your existing mortgage into a limited company name. If you’re looking to move your property into a company structure, you would need to consider a full remortgage with a lender that supports limited company buy-to-let. This process involves selling the property to your company, which may trigger stamp duty and capital gains tax liabilities. It’s essential to seek advice from a mortgage broker and tax adviser before proceeding. For more information on your current options, visit our Birmingham Midshires mortgage guide.
Why do landlords consider switching to a limited company?
Many landlords are exploring limited company structures due to the tax changes introduced in recent years. One of the main drivers is the restriction on mortgage interest tax relief for individual landlords, which no longer allows full offsetting of mortgage interest against rental income. Limited companies, however, can still deduct mortgage interest as a business expense. Additionally, corporation tax rates may be more favourable than higher-rate personal income tax, depending on your circumstances. That said, operating through a limited company comes with its own costs and responsibilities, including company accounts and potential double taxation if you withdraw profits. Always weigh the pros and cons with a qualified adviser.
What are the alternatives if BM Solutions won’t allow a switch?
If you’re currently with BM Solutions and want to move to a limited company structure, your main alternative is to remortgage with a lender that offers limited company buy-to-let products. This involves redeeming your existing mortgage and taking out a new one in your company’s name. While BM Solutions does not support this directly, you may still be eligible for a Birmingham Midshires remortgage if you remain in personal ownership. If your goal is to stay with BM Solutions, consider a BM Solutions product transfer to secure a better rate while keeping the property in your personal name.
Will I pay stamp duty if I transfer my property to a limited company?
Yes, transferring a property from personal ownership to a limited company is treated as a sale for tax purposes. This means your company will be liable for stamp duty land tax (SDLT), including the 3% additional property surcharge. In addition, you may face capital gains tax (CGT) on any increase in the property’s value since you purchased it. These costs can be significant and should be carefully calculated before making the switch. For many landlords, these upfront costs outweigh the potential tax savings, especially if the property has appreciated substantially. Always consult a tax specialist to understand the full implications.
Can I keep my current BM Solutions rate if I remortgage into a limited company?
No, if you remortgage into a limited company, you cannot keep your current BM Solutions rate. This is because BM Solutions does not offer limited company mortgages, so you would need to switch to a different lender entirely. This means starting a new mortgage application, which may involve different rates, fees, and lending criteria. If you’re happy with your current rate and want to avoid early repayment charges, it may be worth considering a BM Solutions product transfer instead. This allows you to stay with BM Solutions while potentially securing a better rate without changing ownership structure.
Are there any lenders that allow switching from personal to limited company ownership?
Some specialist lenders in the UK market do allow for refinancing from personal to limited company ownership, but this is typically treated as a new purchase. Lenders such as Precise Mortgages, Paragon, and The Mortgage Works may offer limited company buy-to-let products. However, this process still involves legal and tax considerations, including SDLT and CGT. It’s not a simple switch, and it’s crucial to work with an experienced mortgage broker who understands the nuances of limited company lending. If your priority is to stay with BM Solutions, it’s worth exploring a Birmingham Midshires remortgage or product transfer instead.
Is a BM Solutions product transfer a better option than switching to a limited company?
For many landlords, a BM Solutions product transfer offers a simpler and more cost-effective way to manage their mortgage. Product transfers allow you to switch to a new deal with BM Solutions without a full remortgage or legal work. This can be especially beneficial if you want to avoid early repayment charges or the tax implications of transferring to a limited company. While a limited company structure may offer long-term tax benefits, the upfront costs and administrative burden can be considerable. A product transfer keeps things straightforward and may still offer competitive rates in 2025.
In summary, while BM Solutions does not currently support switching to a limited company, there are still plenty of options available depending on your goals. Whether you’re considering a Birmingham Midshires mortgage, a BM Solutions product transfer, or a full Birmingham Midshires remortgage, understanding your options is the first step. Explore our related guides to make confident, informed decisions about your property investments in 2025 and beyond.