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  • Tax

    Tax relief options?

    I look forward to seeing the figs


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    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.

    When you say just under 40% bracket are you allowing for the effect of S24?

    You could only deduct 25% of your mortgage payments last year and next year it will be zero. I pay ~£15kpa in interest. So with the band at £50k a net income of £35k would be enough to push me into higher rate. I was near the limit so I switched to buying through a company..So far I have only taken a small dividend with most of the profits going to expand the company. I plan to stop expanding and start paying into my pension which will be tax free, I am over 55 so could access it if necessary.  I am also looking to reduce the mortgages in my own name, as I am taking some DB pensions, which might push me over the threshold (unless Boris increases it as he said he would).

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    Hi 

    Yes I’m still under the threshold, I’ve acquired all my property recently so had S24 in mind and built it into the strategy. 

    I am looking at doing similar - I won’t be taking anything out of the company, rather re invest and build a sizable portfolio and then use it to pensions and look to pass down the family when I die. 

    When I reach a limit to cover the pensions etc , I am  looking at stopping purchasing houses within the company and invest in something outside of it ( stock shares, bonds). as withdrawing the excess cash would be an expensive way to cash out! What are your thoughts ?
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    I am Looking at my company in a very similer way to yourself

    I cant see myself withdrawing Dividends or Salary as I am a 40% tax payer

    But Using it to fund a Pension is a great advantage My wife is a 20% Tax payer so I pay her a Salary via the company up to around 8K a year

    My own opinion is holding property in a company is second best for most investors

    It has limitations other than a small salary and pensions  if a Director is a 40% Tax payer

    20 years ago I thought my paying into a pension was over

    But times have changed  and now I am Maxing out my pension planning now

    and with the new rules your SIPP can be passed onto who you want on your death

    so your loved ones can have a Nice Investment Company and a Nice pension pot when  you have gone

    So it can work well as long as you understand the rules





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    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.


    Tony, he's in the basic rate so there is no s24 impact at the moment.

    Yes he needs advice.

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    Chartered Accountant, Tax Advisor and Mortgage broker

    (and BTL portfolio owner)

    stuart@johnsonsca.com

    02039077022

    Tony


    Id be interested in the basis of the statement re ltd company. Ive looked at this and do appreciate  there are alternatives but i cant find any that mainstream accountants think are safe.

    For alternate schemes such as yours, who underwrites it, what is underwritten and  have you had any challenges to date?


    Best


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    Hi David,

    Thanks for getting back to me.

    Everything we do is based upon HMRC practice and guidelines and fully in line with government policy.  Moreover, in addition to the usual professional fees insurance we carry £2m per matter professional indemnity cover; being: -

    Professional Indemnity insurance covers professionals for losses and defence costs if they provide inadequate advice or services that cause a client to lose money.

    For example the policy covers the following areas but is not restricted to:-
    i) Tax due
    ii) Legal Fees
    iii) HMRC assessments &
    iv) HMRC penalties

    We do not promote tax schemes, and our 'alternate solution' is a legitimate business structure.

    Likewise, mainstream firms as you put it are simply sector specialists and do not have our experience.

    HMRC have looked at one of largest clients and concluded that the arrangements met with their requirements.  That particular business is now floating on AIM.

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    Tony Gimple

    Founding Director, for and on behalf of

    Less Tax For Landlords

    0203 735 2940

    http://www.lesstaxforlandlords.co.uk


    Another small thing, which people might consider to be of some significance, is that Mr Gimple and his associates operate in a huge office building where HMRC occupy probably 80% of it.

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    Hi David,

    Seek professional advice and also see our compilation thread - Resources for reducing landlord tax liability - it has some useful advice from PT tax partner, Rental Income Tax Advisors.

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    This site covers the common allowances:

     https://www.litrg.org.uk/tax-guides/othe...t-property

    I'm not aware of any specific allowance for social housing or disabled tenants, however if you provide supported lodgings you can receive up to £10k pa per person plus up to a further £10k pa tax allowance:

    https://www.gov.uk/government/publicatio...arers-2016

    There are also 2  allowances on interest received on investments, up to £1k pa Personal Allowance and up to £5k pa Starting Rate for Savings:

    https://www.gov.uk/apply-tax-free-interest-on-savings


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    A good teacher must know the rules; a good pupil, the exceptions.

    Martin H. Fischer