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Extracting profits from a property company

Shared from Tax Insider: Extracting profits from a property company
By Sarah Bradford, April 2024

Sarah Bradford explores how profits can be extracted from a property company for personal use in a tax-efficient manner. 

Changes in the ways that unincorporated landlords receive relief for interest costs in relation to residential lettings have led to an increase in corporate landlords. There are some tax advantages:  interest and finance costs incurred in relation to residential lets are deductible in full in computing the property company’s profits for corporation tax purposes; and the highest rate of corporation tax at 25% is significantly lower than the highest rate of income tax at 45%. 

However, the property company is a separate entity from the director-shareholders, and should they wish to use the rental profits for their personal use, they must first extract them from the company.  

There are various ways in which this can be done; some more tax-efficient than others. This article looks at

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