Not a practicing accountant but for educational purposes how do accountants report purchase of BTL into Ltd company?
Bank mortgage 200k:
Dt Asset Cr Lender
Deposit 50k:
Dt Asset Cr Lender
Dt Lender Cr Bank
Dt bank Cr Director loan
Legal fees and Stamp duty 10k: the same as above
Dt Asset Cr Vendors
Dt Vendors Cr Bank
Dt Bank Cr Director Loan
Hi @Dolce_Pro
Unfortunately, none of the support team here at QuickFile are accountants, however, there are some accountants who use the forum, so I’ll leave this thread open in case any of them would be able to confirm this for you.
I would also recommend speaking to your accountant, as they can give you advice tailored to your situation.
Sorry we couldn’t have been more help on this occasion, but if you have any further questions, please don’t hesitate to ask.
That’s kind of you. No worries, will definitely be using accountabt. This is just a question for future transaction
It will depend on a number of things - was the property bought in the company’s name, is the mortgage in the company name also? Looking at your entries, it seems you are talking about a property worth £250k? Director paid deposit of £50k and company took out mortgage of £200k. Director also paid stamp duty etc. of £10k?
So debit investment property with cost of the BTL, credit is £200k to mortgage account, £50k to DLA.
Stamp duty and fees can be capitalised, so debit fixed assets, credit DLA.
Take care with the mortgage as the way interest is recognised in statutory accounts is not necessarily the same as the amounts charged by the lender, it will depend on FRS105 or FRS102. Similarly, the carrying value of the property in future years will depend on which standard you apply.
Always best to discuss these transactions with your accountant before you make the purchase, not after.
Thanks so much, very insightful!
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