November 21, 2006
Dentists Practice Purchase - Hot Topics Q&A
Q. My wife and I are both dentists in our mid thirties. We have paid off our mortgage (other than £1), but want to move to a new area to set up a new dental practice.
What in your opinion would be the best/most tax efficient way to fund our new practice purchase? (eg. business mortgage/loan?; drawdown on our residential mortgage, using this to raise capital for our business purchase? [if this is allowed]; use some of the capital from our existing house sale; combination of the above; or other method?).
A. On a like for like basis, you’d be better off financing the loan via a practice loan rather than through a loan against your residential property. You would get tax relief on any interest on the practice loan as all the interest payments would be treated as a business expense.
So, if you could get a loan for 1% over base rate you’d be paying 6%. We deal with all the specialist lenders so let us know if you want any assistance. As for buying equipment, there are a number of specialist providers of finance for this, such as Siemens.
The key, as you’ll no doubt be aware, is to keep doing all your research and negotiate to get the best deal.
If you've got a question you'd like to ask us just complete the form here and we'll get back to you with an answer (if we publish it we'll keep your name anonymous).
Filed under Investing, Property, UK Resident Dentists by Ray Prince
