Property Through a Company

[didnof]

Hi all,

I’m sure this sort of question will have been asked before but any help would be much appreciated. I’ve spent a lot of time reading up about the advantages and disadvantages of owning properties outright or putting them through a company and it sounds like everything depends on your personal situation.

With this in mind I wanted to see what you thought and whether it would be beneficial for me to put them through a company or not. I’ll give you as many facts and figures as possible to get the full picture. Both my wife and I are higher tax bracket earners and we have 3 properties that we rent out.

Property A – rental income is £525 and the mortgage is £450, profit of rent minus mortgage interest about £200
Property B – rental income is £600 and the mortgage is £480, profit of rent minus mortgage interest about £300
Property C – rental income is £350 with no mortgage.

At the moment I’m paying tax on approx £10,000 of rental income. Would I be better off putting this through a company and making use of the tax free allowance as my understanding is that there is an allowance for companies of around that value. Obviously this will increase as the mortgages get paid off, but even so the tax rate is lower for businesses than what I am currently paying,

Any advice on this would be much appreciated as it is quite possible I’m missing something important.

 

[KGeeson]

Hello,

I would definitely suggest talking to an accountant firm that specialises in Property. When I was looking at investing with my father we spoke to a company called Lemon Tree Financial in London. They were very helpful and whoever you speak to, you will usually get an initial phone call giving you some free advice. Definitely worth the call because we got some great help on our individual situation that we otherwise would not have known.

Best,

Kelly