kirsty123 Posted May 19, 2017 Report Share Posted May 19, 2017 Hi all, i currently have one property that I rent through a management agency. It's come to my attention that the property value has gone up quite a lot so I'm looking to possibly sell this property and invest in 2-3 others in order to increase my portfolio. As I'm still quite new to the landlord world so I'm looking for any advice you might have? Am I better off to set up a limited company to reduce taxes? Thanks in advance! Link to comment Share on other sites More sharing options...
Richlist Posted May 19, 2017 Report Share Posted May 19, 2017 That's a difficult question to answer. I'm actually in the process of gradually selling my portfolio (have been for the last 5 years) because I think the way forward for me is to incorporate. There are so many variables that would affect the answer for you personally.....eg your marginal tax rate, how large your portfolio will grow into etc etc. The Conservatives aim to reduce corporation tax to around 17%.....Labour aim to increase it to 26%. If you are a 40% income tax payer either of those starts to look attractive. If you are a 20% income tax payer the picture is different. Annual tax free dividends will reduce from £5k to £2k as announced in the last budget. But in your shoes I'd first try to get some advice from an accountant. On the property 118 web site there are firms who advertise and offer advice on the various options available to you. Link to comment Share on other sites More sharing options...
kirsty123 Posted May 19, 2017 Author Report Share Posted May 19, 2017 Thanks for that, it's definitely something that I'm going to need to speak to an advisor about I think. It's all quite complicated for a first timer and I don't want to get stuck in a situation where I'm paying more tax than what I'm earning! Out of interest do do you have your own company for your portfolio? Do you think it's beneficial to do that? Link to comment Share on other sites More sharing options...
Richlist Posted May 19, 2017 Report Share Posted May 19, 2017 Not yet.....I don't need to form a limited company until I'm ready to buy.....forming a limited company is the easy bit. I'm not going to be putting my existing properties into the company because to do that I will need to 'sell' them to the limited company. This would trigger a CGT bill on each sale. The company will also have to pay stamp duty and legal fees on the purchase. Link to comment Share on other sites More sharing options...
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