Meg Saksida explores the incorporation of a rental property business from a tax perspective.
Landlords of unincorporated property lettings businesses have had a rough time of it lately. Having only recently got to grips with losing the ‘wear and tear’ allowance and with mortgage interest now only being deductible at basic rates, the Covid-19 pandemic has hit; and with it an immediate loss of earnings, particularly with commercial lettings due to lockdowns; and loss relief only being available to carried forward.
But there is a stamp duty land tax (SDLT) holiday, and property prices might fall. Is the answer to incorporate?
Benefits of incorporation
(a) Corporation tax is lower