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bigduckontax
bigduckontax, Accountant
Category: Tax
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I employed by the company and also have rental income. I am

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I employed by the company and also have rental income. I am on 40% tax band at the moment. Any rental income will be charged at 40% after deductable expenses. I just wonder whether I should register a compant to tax at 20%. Please advise
Submitted: 2 years ago.
Category: Tax
Expert:  bigduckontax replied 2 years ago.
Hello, I'm Keith and happy to help you with your question.
Presumably you would set up the company as a management company to handle lettings. However, unless you transfer the property to the company, the income from rentals would still be deemed to be yours. Transferring the property would lay you open to Capital Gains Tax on the gain on transfer which would have to be at current market price as it is not your sole or main domestic residence. If you do not make the transfer then the value of the property could be deemed to be a loan to a director; not a good idea with horrendous consequences. Of course if you are not a director then that particular problem disappears. I suspect that HMRC would look at your arrangements with a very jaundiced eye in any event.
I regret that you are caught by Benjamin Franklin's dictum that in life there are but two certainties, death and taxes.
So sorry to have to rain on your parade.

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