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Ash
Ash, Solicitor
Category: Law
Satisfied Customers: 10916
Experience:  Solicitor with 5+ years experience
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Hello, I was wondering whether its worth setting up a holdings

Resolved Question:

Hello,

I was wondering whether its worth setting up a holdings company if you are the landlord for one property and generating monthly income from this investment. I plan on buying more properties in the future but just wanted to know if it would be a good idea to set up a company now.

Thank you,
Submitted: 3 years ago.
Category: Law
Expert:  Ash replied 3 years ago.

Alex Watts :

Hello my name is XXXXX XXXXX I will help you with this. Please note that I am a working Solicitor and may be on and offline as I have to attend Court and meet with clients, even at weekends. As such you may not get an instant response when you reply as this is not an ‘on demand’ live service, but rest assured I will be giving your question my immediate attention upon return. There is no need to wait here, you will get an email when I reply.

Alex Watts :

Probably not.

Alex Watts :

This is because when you purchase you pay tax straight away.

Alex Watts :

For example, if you purchase a property for £100,000 and rent it would be £500 a month, you pay tax on the £500 a month from day one

Alex Watts :

If you did this through a Company then at the end of the tax year you would pay corporation tax

Alex Watts :

If you want to take the money out you would then pay personal tax

Alex Watts :

So finance wise its more cost effective to do it personally as you dont pay corporation tax

Customer:

Ok. I see.

Alex Watts :

Can I clarify anything for you about this today please?

Customer:

If I am generating an income at the moment on a personal level, should I be paying tax on this anyway?

Alex Watts :

Yes

Alex Watts :

Minus allowable deductions but for that you would need an accountant

Alex Watts :

Can I clarify anything else?

Customer:

Is this higher or lower than the corporation tax?

Alex Watts :

Higher

Alex Watts :

But even if you made a profit you would pay corp tax and then if you took the money out would paid personal tax

Customer:

I see what you mean.

Customer:

Expenses wise eg.building work, can I claim against the company at a lower rate?

Alex Watts :

No, its always the same

Alex Watts :

And if its building work you can generally only deduct that when you sell it

Customer:

Ok.

Alex Watts :

If this answers your question could I invite you leave feedback on my service which I hope has been excellent today, if you need more information or help then please click reply.


Please remember that I am always happy to help if you have future questions, even if I am in Court I can normally respond within a few hours. For future information, please start them with ‘For Alex W’.


 


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Customer:

are there any other disadvantage or advantages i should be aware of?

Alex Watts :

If this answers your question could I invite you leave feedback on my service which I hope has been excellent today, if you need more information or help then please click reply.


Please remember that I am always happy to help if you have future questions, even if I am in Court I can normally respond within a few hours. For future information, please start them with ‘For Alex W’.


 


Please bookmark my profile if you wish for future help: http://www.justanswer.co.uk/law/expert-alexwatts/

Alex Watts :

No that's it.....

Customer:

thank you for your time.

Ash and other Law Specialists are ready to help you