Company borrowing at cheaper rate using Deed of Trust

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I have been reading "Using a property company to save tax" by Carl Bayley and would like to set up a property company to take advantage of some of the benefits outlined.

However, one of the biggest disadvantage of using a property company for me is the higher borrowing cost that a company bears relative to an individual.

The "Using a property company to save tax" book states that "One way to resolve this dilemma is for the individual investor to take legal title to the property in their own name... The investor then enter into a 'Deed of Trust' with the company...under which the investor agrees that the beneficial ownership of the property lies with the company and the company agrees to recompense the investor for any costs incurred in relation to the property. The effect of the Deed of Trust is therefore to put both the company and the individual investor into the same position as they would have been if the company had purchased the property whilst allowing a more favourable level of borrowings to be obtained".

Does anyone have any experience of doing the above and did they have any problem with the mortgage company with using the Deed of Trust in this way?

Thanks.
09/11/2013 14:46

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