If you own property, this could either be individually or through a Limited Company. If you have the one property you own and rent out, you’re probably better owning this individually and paying Income Tax, as long as you’re a basic rate tax payer.
However, if you have more than one property or intend to grown your portfolio, it’s better to operate through a Limited Company. Why? Well, if you have two or more properties, you may be paying some tax at the higher rate of 40%, whereas operating under a Limited company, profits are taxed at 19% up to £50,000 and 25% over £250,000 with a marginal rate relief in between – but all less than the 40% you would pay.
There’s a but (of course!) as if you own properties now and want to sell them to the Limited company you could incur stamp duty, so look at purchasing only new property through the company instead. There is also no tax allowance under a Limited company, whereas there is if you own it yourself. Finally, mortgages may be more expensive under a Limited Company, so a few things to consider
If you are in doubt and want to talk to someone, please give either of us a call
Call –Tim: 07875 410466
Call – Nic: 07985 645087
