For example, if your name is John Smith you could buy properties in that name or use a business name such as John Smith Properties or virtually any name you like (so long as no-one else is using it or it breaches a registered trademark). So you might be able to use something like JS Quality Homes but try something like Virgin Homes or Wimpy Homes and you will find yourself in trouble - probably in Court!
The main advantage of buying as a sole trader is that it is simple, lenders will offer a higher loan to value - 85% is standard even for people with poor credit history, and 95% is not unknown - than they typically will to companies or trusts. On the downside, be aware that if you trade in a name that is not your own then lenders and solicitors will need to do even more tedious Anti Money Laundering checks on you.
Taxation. This is probably the worst structure to use from a tax planning position. Profit on rental will be taxed as part of your overall income at the highest rate and profit on sale of properties - Capital Gains - will be taxed at 40%. That said there are ways to mitigate the tax burden and you should speak to a specialist property accountant or independent financial advisor. If you contact us we will be able to put you in touch with someone local to you.
To consider the pro's and con's of different types of company structure including trading as a sole trader in greater detail visit the following website: AR Corporate - Types of Company or download the following document Why Trade as a Limited Company.
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