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Yesterday I went along to a presentation on the new tax changes, and explained about the use of a company structure (and paying incorporation tax instead - as I am a higher tax payer).
Have many done this yet? Is it a good option even taking into account CGT, and then stamp duty surcharges? Could the government just stop this "loophole"?
Just don't want to rush into this and get burnt.
Be great to here peoples experiences, or any other clever alternatives?(*Moderator note: See this related thread - Ltd Co is the worse possible way to own BTL? *).
I stayed put partially because of the fear they would move the goalposts again
More so though because the costs to move over for me was unfavourably high
Some shifted across and paid those costs - so yes could get burnt
I went on the offensive and bought more
The extra income pays the extra tax
Jonathan Clarke. http://www.buytoletmk.com
Same here Jonathan. Have you considered the LLP/ hybrid structure in future? I'm feeling drawn to that model.
Have you got more info on this please?
I have considered it yes but again for now I`m staying put in case they introduce additional measures
I dont like stuff i dont fully understand and HMRC may attack that model as well
Also it makes me nervous when I find that seemingly very knowledgeable tax brains cannot agree 100% either
HMRC are all powerful so their interpretation would out trump the average tax advisors interpretation
One would have to have deep pockets to challenge the stance they take
They have already demonstrated their ability to go up against all normal held interpretations of accounting rules
The thought of the effort and cost to change wholesale does not sit well with me
So I`m not sleep walking into a problem but just using the time to watch and wait and tinker
I stress test for my extra 24 tax bill + a 5% rise in interest rates + a 20% drop in prices
Whilst its not pretty I will survive and still be better off than when i started this roller coaster ride
If I was at the start or middle of building a portfolio I would give it more attention I expect
But as i am at the end I can afford a little leeway before deciding to do something or indeed do nothing
My procrastinators option is always in my back pocket and appeals on some days
And that is to sell half and pay down on the other half
But the thought of losing all that income and capital growth in the years ahead stops me picking up the phone
Jonathan your strategy of buying more properties to pay the tax is a good one except you now have more properties to look after .
Yes agreed - The time factor with one or two more though is a relatively minor factor I feel
I like to think my systems are fairly streamlined and efficient now
So the advantages for me sharply outweighed the disadvantages
I am thinking of buying more property if I stay in the UK but i am also thinking of selling half my properties and moving overseas to most likely portugal.
There is no inheritance tax to pay in Portugal so the benefits are better weather, fewer people cheap cost of living and less property to manage.That means more free time to enjoy myself rather than answering the phone and I can pass my wealth to my family without having to worry about the tax man.
They also dont discriminate against landlords and grab businesses that have taken 20 years to develop or pretend that BTL is the same as stocks and shares
Your Not alone Bill I am thinking of doing the same thing
why give 40% of what you have worked for to HMRC when you don't have too
I am going to become an Ethnic Minority in someone else's country
Learn Change and Adapt ?????
All comments are for casual information purposes only. If you wish to rely on any advice I have given please ensure you obtain independent specialist advice from a third party. No liability is accepted for comments made.
I own Both
with S24 my tax bill would have gone up four times higher than last year so the headline rate of income tax would have been around 75%
I was not prepared to pay such high tax
so I have moved some property but even then If I was to take a Salary or Dividends the rate would still be over 50%
The Company serves me well with succession and paying into a directors pension and paying my wife a salary who is a basic rate tax payer
But at the end of the day its better than paying 75% with S24