Originally published at: Should I Let My Properties through a Limited Company? | OpenRent Landlord Hub
Letting a property through a limited company can help landlords with larger portfolios pay much less tax. While that promise may be tempting, it’s important to stop and research whether incorporating a company is a good idea for you. Yes there are large benefits, but also some considerable disadvantages. In this guide, we explore the…
The other issue for me is what happens when I die because my properties are my pension so I’ve got no intention of selling them.
As it stands at the moment, the potential capital gains tax liability is extinguished by death if you own the properties personally because inheritance tax is potentially payable.
If they are in a limited company, that is it’s own legal entity so any potential capital gains tax remains within the company.
On the plus side, the inheritance tax value of the company will be slightly lower because it has a tax liability on the increase in value.
Swings and roundabouts
i had my own company and put 21 flats into it. I had a similar number of rental units in my own name. I remember a IFA coming up with reams of papers (literally) on the benefits of company ownership to convert the rest over to the company.
We didnt bother for several reasons. 1-lots of time 2- buying and selling duties , contracts etc 3 accounting stricter on companies 4 its really easy to start a company but when we wound up the company it took literally years and was not cheap. 5 the goverment are always changing the tax rules and if they see an advantage they often move to close that gap. (In passing i put them in the company because of IR35, something that was a damp squib) So on paper yes it looks good currently but for the hidden aspects personally i wouldnt bother. You ask yourself how much difference would it make to your quality of life and it can be a black hole converting everything over. Im not even sure all the elec and gas tests and epc’s are still valid if you change over, there are lots of things like this to consider
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