A common question for those with residential investment property or thinking of purchasing residential investment property is whether it should be owned personally or via a limited company.
Ian Tongue explores some of the considerations to make and provides a real-world example of a common scenario for consultants.
It is reasonable for those who own residential investment property to feel like they have been squeezed with changes to the tax-deductibility of mortgage loan interest, increased stamp duty for second homes and changes to tax relief around expenses on repairs and renewals.
These changes have made people question whether personal ownership of rental property is a viable option. And with the significant amount of consultants trading through a company, it is natural to ask whether transferring or purchasing new property in the company is tax-efficient.
It is easy to look at the corporation tax rate of 19% and conclude that it must be tax-efficient, but to consider the position adequately you need to consider more factors, including the likely future sale of the property.
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