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Advice4accounts​

Accounts Tax Payroll VAT

Advice4Property:

Property rental is a flourishing Business in the UK.

We advise clients on their tax position, whether to buy properties as Limited Company or personally.

Benefit of forming a Limited Company to buy and rent properties is:


  • Full Mortgage Interest can be claimed, not available on Privately owned property since 2020.
  •  Limited Company pays 17% corporation tax on rental properties, but on a personal basis they have to pay tax as per their tax position.            
                          i.e. Basic rate – 20%
                                Higher rate – 40%
  • In a limited Company, part of ownership can be added by issuing Directorship or issuing shares. But personally, it is not possible, i.e. you can add son or daughter as Shareholder or Director.
  • In a limited company you can keep company profits in a company, you don’t pay any further tax apart from corporation tax. If you do not take Dividends you can reinvest that money to buy another property and build your empire. Not possible in privately owned property.
  • You will pay less stamp duty when you sell shares of the company.
  • You can get better loan in future; you can show your limited company holding 3 to 4 properties.
  •  As Limited company is a separate legal entity, in case of Company’s Financial Position deteriorate the private assets or directors and shareholders will be safe from creditors.


Process:


Step1 – We will form a Limited Company.


Step2 – You will have to buy property with solicitors’ guidance in the name of the Limited Company making payment through the company’s bank account.


Step3 – You will provide us with rental Income and Expenditure for each property. We will extract profit from each property and will prepare Profit & Loss and Balance Sheet.

We will submit at year - end:

  • CT – 600 to HMRC – P&L and Balance Sheet.
  • Accounts to Companies House.
  • Confirmation Statement to Companies House
  • Self-assessment tax return for each Director.
  • We will advise you on tax saving strategy.

Privately Owned Property:


We will prepare an Income and Expenditure from your rental Income.

We will submit a self-assessment tax return analysing property rental.

We will also discuss tax planning before submitting self-assessment tax return.