Meg Saksida considers whether the incorporation of a property rental business is worth it from a tax perspective.
Holding a property rental business personally can have several drawbacks, not least of which being the comparably high tax rate.
Unlimited liability is quite a scary prospect in these litigious days, and with the inability to offset mortgage interest at higher and additional rates coupled with income tax payable at up to 45%, is it any wonder that many landlords are considering the possibility of a corporate wrapper for their property businesses? At 19% corporation tax, a letting company should surely decrease your tax bill? However, as Shakespeare said, “all that glitters is not [always] gold”.
Corporate comforts and complications
(a) 19% corporation tax
The main reason