Tax benefits...

[memond1]

Hi,

I am looking for some help. I have recently got onto the rental ladder and I am now trying to get my finances into order.

I need some advice on what I need to do. Currently I own 3 houses and I am not sure whether I need to setup as a private business in order to get tax benefits.

For example I have funrnished all 3 of the houses which has cost me quite a bit, and I am wondering whether I will get any tax breaks from this at the end of the financial year?

If anyone has any advice or can tell me where to look I would be very grateful

Martin

[Matt Churchill]

I know that you can offset related expenses against any profit you make, and thus lower tax burden, the same with any interest payable on any mortgages you may have.

Effectively, you are running a business and should complete a tax return (if you don't do so already) you'll then be able to offset these expenses on your tax return.

Best thing I would suggest is to talk with an accountant about how best to do this.

[nick c]

Hi Memond1

We have a selected supplier list of accountants on this website - http://www.residentiallandlord.co.uk/accountants.htm

Sherena Glanton (Plym77) has been a great help on this forum, she could advise you, and the company Sherena works for - Horwath Clark Whitehill can help with any tax issues you have.

sherena.glanton@horwath.co.uk

Also check other posts on this forum regarding tax benefits.

Hope this helps

nick.colthorpe@residentiallandlord.co.uk

Partnership Manager

[plym77]

Hi Martin

My apologies for my delay in replying, I have been on holiday. I am a Chartered Tax Adviser and should you still require help on this matter, please do feel free to email me on sherena.glanton@horwath.co.uk

The link below also takes you to HM Revenue and Customs Property Income manual (paste it into your browser), but I would suggest that you do seek the advice of an accountant - I am of course happy to help, should you require my services.

http://www.hmrc.gov.uk/manuals/pimmanual/index.htm

Regards

Sherena

[TMH]

I have a question for Plym77,

Its a little off topic but related to tax, accountancy & company stuff, I hope no one will mind me adding my question here.

Please can you tell me if it is possible for a partnership, a non limited company, to own a limited company, in fact several limited companies, as a non limited parent company ?

If so I will explain my reasons for asking, as I think it will be invaluable information to many, if its not possible then there wouldnt be any point my explaining why I am asking

Thank you in anticipation

TMH

[Matt Churchill]

TMH, there are no reasons why a limited company cannot be owned by a partnership.

[TMH]

Thank you Matt,

For everyone curious about why I asked,

I wanted to find out the answer as I own several limited companies, which I wish to place under the umbrella of a or a few parent companies.

If this is done with a Limited company as parent, the opportunity to take drawings from

the parent company are curtailed by the company structure.

However, if the parent company is a partnership, the "drawings" of the owners/partners is not restricted.

In partnerships and sole trading, one only pays tax on the company profits, of which naturally the drawings would be part of those profits, and one can draw money out of the company at any time without further taxation, but one does not pay the corporation tax one would pay as a limited company, and then income tax when one draws a salary, double taxation ! Nor is a yearly company return required or costly audited accounts.

The one point I was unsure of was that it is permitted for partnerships to own such junior companies as LLCs, which Matt has kindly cleared up for me

TMH

[plym77]

Hi TMH

I would suggest you discuss this with your accountant. There are many aspects to consider here and it would take far too long to put these points down in writing.

Before you look to put your new structure in place, please speak to your accountant.