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Sam
Sam, Accountant
Category: Tax
Satisfied Customers: 13863
Experience:  26 HMRC expertise, PAYE, Self Assessment ,Residency, Rental Income, Capital Gains, CIS ask for Sam Tax
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I am looking to purchase a buy to let property under a limited

Resolved Question:

I am looking to purchase a buy to let property under a limited company - this is a long term purchase where the monthly income from the property is more important than the possible increase in value on sale. My question is what tax implications are there in having a buy to let through a limited company - also as an example - if we bought a house for £130k and rent it for £700 pcm - in terms of tax it would be 20% corporation tax plus any tax on dividends - are there any other taxes? Also when we come to sell it, if it is worth £150k (£20k gain) what tax would the company need to pay on the sale price and what is the most tax efficient way of withdrawing those funds?
Submitted: 2 years ago.
Category: Tax
Expert:  Sam replied 2 years ago.
Hi
Thanks for your question
Buy to let properties can only be purchased and run through a limited company if there is trade income (not just rental income)
So this from what you advise is merely rental income and has to be declared to HMRC as such, which means that rents less expenses will see the net rents liable to the normal rates of income tax.
As the rest of your questions are all based on the fact you are of the understanding that you can make this purchase through a limited company I have not answered them, but do feel free to ask any follow up questions
Thanks
Sam
Customer: replied 2 years ago.

Thanks Sam,

What would you recommend as the most tax efficient way of owning multiple buy to let properties? Note: this needs to be setup so there is ownership by multiple directors.

Expert:  Sam replied 2 years ago.
Hi
You either will have to set up a trust - although this can cause restrictions to access any profits (as held for any beneficiaries - which would be children/grandchildren/spouses) and you would need to seek legal advise on this so it were to meet your short and long term needs.
Or you just set up with the maximum of 4 with the land registry (as I think this is the maximum number of names permitted on deeds) with an additional note as to other co- owners.
Then you would need to draw up a an agreement of who owns eat share within either a joint tenancy or tenants in common -
Let me know if I can of any furtehr assistance, and it would be very much appreciated if you could rate the level of service I have provided (or click accept) as this ensures I am credited for my time by Just Answer.
Thanks
Sam
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