OpenRent Community

Any folk incorporated to pay less tax

Looking for advice from folk who have incorporated post section 24 rules to pay CT not income tax. Ideally people who do not consider themselves to be ‘savvy’ with business and finance etc

I am considering it for my portfolio (2 flats and a house) but want to know how much work I am taking on!

Hello Ingrid,

I had considered this as my portfolio is several properties. I am informed that it is not worth the bother for me as I soon plan to sell or pass one onto my children.

Best regards,
Simon

Not worth the bother because too much work? Did it look like a lot of admin and book keeping?

Hello Ingrid, apologies for my delayed reply. I have just seen the email of your reply.

It was not worth doing all the paper work since I was soon to not be the owner. Furthermore, once one vests property into the limited company, it is very hard to ‘get the property out’ of the company. That is to say, my daughter would not have been able to simply own the house by a transfer of the deed.

There were more elements to this than stated above, but the complexity of them is such that the details have not stuck in my mind long after deciding it all not for me!

Best regards,
Simon

Another consideration is tax. My understanding is that if you transfer to a company you have a deemed disposal and hence may have capital gains tax to pay. In addition you would need to discuss with the mortgage company as once moved into a company the company own the property and hence would need the mortgage in their name. That may have a whole lot more issues to deal with. I looked to do similar for a short time but came to the conclusion that the tax consequences with capital gains tax and then possible stamp duty when bought by new company seemed to out weigh the benefits. You would also really need to know what you are doing as easy to fall foul of tax laws and get it wrong

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