advice before incorporating
Marijana No Comments

Buy to let property investors are being urged to seek the proper advice before incorporating their business into a limited company to avoid rushing into any changes.

Specialist buy to let broker Commercial Trust Limited has issued a warning to landlords following recent reports from the press which suggest that incorporation is becoming increasingly popular in the buy to let sector. There is a concern that landlords may rush into this decision without adequate consideration.

The reduction in mortgage interest tax relief and the introduction of stamp duty have both contributed towards the trend of landlords opting to incorporate in order to improve their finances. It was predicted by lenders that this trend will continue into the coming year as landlords aim to avoid paying taxes and increasingly see incorporating as a viable option.

Chief executive at Commercial Trust Limited, Andrew Turner, expressed concern about the trend: ‘Whilst it is understandable that buy to let landlords want to avoid paying more tax than is necessary, it is essential, as with any investment, that they fully investigate how their personal circumstances apply to buy to let taxation. Upon face value, many landlords are perhaps seeing the headlines and are considering incorporating their property investments, as limited companies are taxed differently to individuals. However, taxation is a complex issue and I would urge anyone considering this move, to seek advice from a tax specialist first, to ensure that their buy to let venture would actually be better off tax-wise, in a limited company.’

He continued: ‘Having done so, we would be delighted to help any landlords that then want to consider investing in buy to let as a limited company. There are a wide range of lenders and products that are available and based on individual circumstances. But the message should be clear to landlords thinking of taking the limited company option, to investigate fully first.’

Source: Residential Landlord

Leave a Reply

Your email address will not be published. Required fields are marked *