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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:
We have a solution which creates a corporate umbrella for your existing property portfolio but where the legal title & finance remains in your name as individual. Restructuring in this way avoids expensive refinancing costs which is a potential large cost saving but also brings with it many benefits.


Buy to Let Restructuring
Ability to off-set mortgage interest repayments
Buy to Let Restructuring
Low corporation tax of 20% applies reducing to 17% by 2021
Buy to Let Restructuring
Defer tax payable for 21 months
Buy to Let Restructuring
Tax free dividend up to £5,000 with the option of adding other shareholders
Buy to Let Restructuring
Offset running costs against expenses
Buy to Let Restructuring
No stamp duty
Buy to Let Restructuring
Stop the clock on Capital Gains


Other benefits of Incorporation:

• When building a rental property portfolio, profits can be retained for reinvestment into buying more property, you therefore only pay personal tax when the money is extracted from the Company. As an individual you are heavily taxed on profits as they are made so tax become due regardless of what you choose to do with these profits. Companies only pay 20% corporation tax, which is scheduled to reduce to 18% by 2020.

• Companies are not affected by the restrictions of finance cost relief.

• Greater flexibility in terms of IHT planning (adding additional shareholders)

• The ability to make pension contributions. A companies contributions into a company pension scheme are tax deductible.

• The ability to make Private Healthcare payments which are tax deductible, but possibly could be subject to BIK charge.

• The ability to employ a member of staff and get tax relief. As they will be Pay-As-You-Earn, all required taxes are paid. There is the potential to claim up to £3,000 annually in Employers Allowance regarding company national insurance.

• Liabilities are limited to the value of the company. Mortgage lenders often require a personal guarantee but other liabilities will be ring fenced as a result of incorporation.

What if I don’t incorporate?

• Based on a portfolio annual rental income of £500,000, with mortgage interest of £300,000, a higher tax rate landlord will pay additional tax of £250,000 by 2020.

Once you have incorporated 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 structure is a flexible one, and if you choose to add additional properties into the portfolio or remove them this easy to do, bearing in mind that there are legal contracts in place so both parties must agree.
 

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Registered Office: 12 Cathedral Road, Cardiff. CF11 9LJ