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  • Tax

    S24 implications

    I'm amazed that you can earn 100k and own 8 properties but have no pension, savings or even the means to pay any fees. Can you cut back elsewhere in order facilitate transfer to a company?

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    I agree I did have savings but made some very bad investments in the financial markets and lost everything. Having to start all over again now unfortunately. I feel stuck buying these properties as do not have the cash to pay the stamp duty etc when transferring to LTd. harsh life lesson learnt

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    You shouldn't feel too bad about your situation

    You actually did the right thing.

    Shame you didn't do it before you tried the financial  markets; I lost as you did!

    Many LL  have become so after trying the markets and like you have lost heavily.

    Some of those have managed to secure their position  by becoming  LL.

    Nobody could ever have imagined S24 least of all from a Tory Govt.

    You are just one LL amongst about 440000 others that will now be subject to this crazy S24.

    You are doing OK and were prior to S24 like most LL  now subject to S24.

    It is highly unlikely that the various  strategies suggested will be sufficient  or even possible.

    Inevitably you will have to consider offloading properties to reduce your S24 tax exposure.

    It is highly unlikely that rent increases  could be made sufficient  to cover the S24 tax let alone a normal rent increase as well.

    You and I are just some of the victims of this ridiculous  S24 tax.

    We are being forced to take drastic action to salvage something out of the wreckage of what was before S24 very successful businesses.

    My strategy involves increasing rents.

    So far no tenant has said no when I explain my rationale for the increases.

     So my rents increase every year; I have no choice as I am now an unpaid collector of Tenant Tax!

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    If  you have no pension, you could set up a SIPP and pay 40K per annum into it before tax. That will save you a lot of tax and the investments should grow in value too. Better still, do it through your employer as a salary sacrifice if they are amenable.  After a couple of years you may be able to release a small amount tax free - be very careful how you do this -  which will help with the cost of the stamp duty etc to transfer the properties.

    If I were you I would also be looking  at the possibility of forming a partnership with your mother and running the business like that for a couple of years before transferring the properties into a company, but you would need more detailed advice on that.

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    Pensions are a golden opportunity

    a great number of investors just don't understand them

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    Learn Change and Adapt ?????

    Hi Steve

    I agree with Dislexic_landlord you should crunch the figures and see how much you will pay personally and how much you would pay as a company.

    I would say in the long term if you are looking to keep the properties you will pay a lot more tax personally.  It depends what you are looking to achieve in the future.

    Also disregard the idea you have years to sort this, you need to have someone who will be pro-active for you and give you an heads up to your tax in two years time based on current situations and various ideas coming out of the government.  I always let my clients know in advance what they need to pay and what they will be required to pay in the future, its the best way to plan for tax savings, after the event is too late.

    You also have to plan your tax regarding the gains you are going to make now rather than in the future, you have a lot of work to do.  I am sure your accountant will be happy to help.

    Kind regards

    Wayne

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    Wayne Ashcroft

    Accountant | Wayne Ashcroft Limited

    Tel: 07828 882400 | Email: wayneashcroft69@outlook.com

    Use a calculator like https://www.property118.com/consultancy-...alculator/ to see the imapact of the tax changes over the next few years. Using guesses based on the numbers you gave it looks to me that the tax would soon be larger than your profits on your properties.

    You don't have any saving but you have quite a large income. Could you not pay for the transfer to a company of a couple of properties per year for the next four years out of your income? Or sell one property and use the proceeds to transfer several?

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