Should you move your buy-to-let properties into a Limited Company?
This conversation provides some reasons to consider if you’re thinking about moving your properties from your own personal name into a Limited Company.
Join Richard Jackson, Co-Founder of Alphaletz and Mark Alexander, Founder of Property118 as they discuss some of the reasons why this could be good for landlords in the UK. Richard talks about this own personal experience of being a portfolio landlord and some of the benefits he experienced. This is not financial advice, but an open discussion on the topic that we hope may help other landlords.
Mark specialises in helping landlords to move their properties to limited companies for tax efficiencies. He started Property118 in 2011 which has grown to be one of the largest advisor networks for UK landlords.
Why should landlords move to a Limited Company?
Mark explained there’s many reasons why people move to or set up a limited company and the reasons aren’t always tax motivated. For example, you might want the protection of limited liability, or obtain finance through a limited company, which is a lot easier now.
“We have to look at the whole position holistically rather than just tax. 100% of finance costs can no longer be off set against rental income and you only get a 20% tax credit, so if you’re a higher rate taxpayer you will really have felt the pain as of January 2021.”
And that’s only part of the story. When people incorporate it:
- Resets your base costs for capital gains tax
- Enables business continuity (which is explained further in the conversation)
When is the best time to start a limited company?
That was an easy question for Mark who said, “Today. Start the foundations to your business now. Get yourself a smart property company structure from day one.”
- Don’t buy an off-the-shelf ltd company
- Make sure you do it right and get professional advice
How do people get started?
For further information, take a look at the eBook from Property118, which looks at the types of recommended strategies.
Property118 | * Landlord Tax Planning
You can also book a consultation with a Property188 tax consultant.
In terms of cost, is it expensive?
Richard broached the subject of cost with Mark who said, “The planning we implement will pay for itself in 1-3 years. Getting it right in the first place is vitally important.”
Both Mark and Richard agreed that landlords have to think as a property business, and so it needs proper systems and structures. The landlords doing that are thriving.
The parting message was “Think like a business!“
You can listen to the full conversation here.
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