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Buy to Let Tax Calculator...

See how the new tax changes on buy to let properties will reduce your profit and how much tax you will need to pay.

Please enter your appropriate tax rate:
Please enter your total monthly rental income:
Please enter your total monthly service charges/running costs:
Please enter your total monthly mortgage interest:
Q. Is it a Tax Scheme?
A. No. This is an interim solution to the new budget and is for individuals that wish to operate under a company umbrella with a view to transferring properties at a future date.

Q. How much does it cost?
A. We charge a fixed rate affordable fee of £1,950 + VAT plus the additional charge of £150 + VAT per property. The fixed fee is payable upon setting up the company, the additional fees will be charged prior to the final documentation being sent out.

Q. How does a Limited Company work? What do I need to do?
A. Once your Limited Company is formed, the process of transferring all rental income and associated running costs will begin. All the costs of your property portfolio will be ring-fenced within the company and easier to manage. The main deductible costs will be mortgage interest, property management costs and insurance.

Q. What benefit do I get for effectively losing all the rights to my rental income?
A. You hand over all responsibility, risks & rewards of your portfolio to the limited company. As the company is taking over all responsibilities, it is entitled to the rental profits, on which it will pay corporation tax of 20%. You will no longer need to declare this income on your tax return so will benefit from a reduced payment on account of tax.

Q. Is there any Stamp Duty to pay?
A. No. The property remains in the name of the individual so there is no Stamp Duty. Stamp Duty only becomes payable if the property is refinanced and transferred into the Limited Co.

Q. Is there any Capital Gains to pay?
A. No. Under this restructure, the open market value of the property is fixed and there is an option for the Limited Company to purchase at that agreed price at some time in the future. Capital gains will only become due if the Limited Company exercises this option.

Q. Can I change my mind?
A. Yes. This process can be reversed if all parties agree. However, this is a legally binding contact.

Q. Do I have to refinance?
A. No. Your mortgage remains in your name until you decide that you want to refinance the property into the Limited Company.

Q. Can I leave the rental profits in the Company?
A. Yes. This is a great advantage of a Limited Company, you will only have to pay tax when you extract the funds, whereas currently you will be paying tax on all profits regardless of whether you take them or not. If your plan is to build up a property portfolio is this an ideal solution to do this within a Limited Company.

Q. When will I have to pay my company tax?
A. You will now be paying Corporation Tax at a lower rate of 20%, reducing to 17% in 2021. It is payable 9 months and 1 day after the first 12 months of trading. This means that will have a cashflow advantage of 21 months before paying tax, whereas currently you will be making payments in advance towards your tax bill. Any dividends taken will be declared as normal on your Tax Return.

Q. Can I pay company dividends to other people?
A. Yes. You can pay dividends to anyone who is a shareholder of the company. All shareholders are entitles to a £5k tax free dividend.

Q. Can I employ people to work within the property management company?
A. Yes. You can, you will be registered for Pay-as-you-Earn so all PAYE taxes will be paid as normal.

Q. Can I have a company pension?
A. Yes all company pension contributions are a tax deductible expense.

Q. When do the new tax rules take effect?
A. Tax relief on mortgage interest reduces by 25% per year from 2017 to 2021 at which point there will be no allowance mortgage interest relief.

Q. Do I need to advise my mortgage company?
A. There is no legal requirement to seek the permission from a mortgage lender or inform a mortgage lender of the restructuring arrangement, unless there are specific clauses/conditions in the mortgage contract between the parties requesting a borrower to do so. There are no such conditions in most mortgage contracts. Lenders do not lose the legal entitlement to the property so as long as the company continues to adhere to the terms of the mortgage there shouldn’t be any issues.

Q. How long does it all take to complete?
A. There are a few stages to go through but we monitor every step of the way to make it as pain free as possible. You will be informed by email at each key stage.


Q. Can the ownership of the company and my existing portfolio be the same?
A. Yes, but the restructuring works better with additional shareholders. We recommend that you take advise from your accountant.
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VAT No: 239111918. Company No: 10097465 Company registered in England & Wales
Registered Office: 12 Cathedral Road, Cardiff. CF11 9LJ