Moving property into ltd Company

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    Moving property into ltd Company

    Hi,

    I currently own a property outright with no charges which I paid £30,000 for back in April personally.

    It's currently rented out for £400pcm, thus I'll be declaring this on my self assessment.

    Wondering what the charges would be to transfer this into a limited company that I'd set up, how does it work as technically I'm transferring an asset worth £30,000

    I understand I can then rent this through the company, and earn upto £5,000 in dividends interest free.

    Any advice would be great.

    Thanks.

    #2
    You need to work it through with an accountant/solicitor.

    There's the cost of setting up the company and the costs of the conveyancing.
    You need to factor in the costs of transferring everything back out and winding up the company.

    It's not a huge amount of complication, but it can be more costly than the tax you're going to save (depending on all kinds of factors, like your income tax rate).
    When I post, I am expressing an opinion - feel free to disagree, I have been wrong before.
    Please don't act on my suggestions without checking with a grown-up (ideally some kind of expert).

    Comment


      #3
      If the property is held under own name , the rental profit £400 x 12 months = 4800 is taxed with job income at your income tax rate 20% or 40%.

      If the property is transferred to hold under company name , the company has to pay 20% corporation tax on £4800 = £960. leaving £3840 payable in dividend to you.

      Not worth the hassle of running a company which has annual reporting obligations to Companies House.

      Comment

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