letting as an individual vs through a business

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    letting as an individual vs through a business

    Hi All - newbie here so please bear with me!

    I have a particular set of circumstances whereby I am in a dilemma as to whether it would be more beneficial to buy to let as a Ltd company as opposed to as an individual - any one got any similar experiences/guidance?

    Situation is as follows:

    I have been running a successful business in manufacturing for over a decade now and earn a living through annual dividends and expenses as a basic rate tax payer at the threshold limit, but have always wanted to have and run a property portfolio - which is something I have been actively researching for the last 18 months or so. I am in a position where I can afford to do that now, but cant get my head around whether it would be better and more efficient for me to set up and buy property to let as a limited company or take the hit in income terms.

    My initial philosophy is regardless of which way I go - I wont be looking to take an income form any monies coming in rather to use it to re invest in more property to build up my portfolio.

    I hope I have posted this in the right place!

    Any advice/guidance would be most appreciated.

    What does your accountant advise you do?


      Originally posted by Gordon999 View Post
      What does your accountant advise you do?

      Thanks for responding - reason I am asking is I am getting different opinions from 2 different accountants. One says do it through a Ltd company, other says its not that much more beneficial and to just set up as a individual.........hence the confusion.


        There is more administration work involved using a property company and the interest rates for mortgage loans are ususally higher for companies .

        2 different accountants ? are they both fully qualified professional accountants ? they should give you the same tax advice . BUT you should not rely on unpaid advice from this forum- it may not be correct..

        The company has to file annual accounts returns to hnrc and Companies House. and file annual members return and mortgage charges etc to Companies House .

        The personal income tax rate at 40% applies to your existing income exceeding 41500 threshhold.

        The Company tax rate is 20% up to 300,000 annual profit but if the profit (after 20% tax ) is paid out as dividend to shareholders, then it is added to personal income from other sources and may be chargeable at 40% tax rate.


          Thanks for your comments - will take your advice and find a 'specialist' to talk to!


            Depends on your specific circumstances.

            Company better for sheltering income.

            Personal often better for CGT.


              If you dont need to take profits and intend to build a portfolio over time it will probably make sense to use a Co as you will benefit from the lower tax rate and will be able to reinvest the saving.


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