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Property rental businesses: Is incorporation still worth it?

Shared from Tax Insider: Property rental businesses: Is incorporation still worth it?
By Lee Sharpe, January 2024

Lee Sharpe considers the merits of running one’s portfolio through a limited company as tax rates seemingly march ever upwards. 

Readers will be aware that landlords have long mulled the possible benefits of running their rental businesses through a limited company. Over the last several years, this has more than likely been prompted by the government’s wholly artificial restriction of income tax relief for the finance costs of letting residential property, as gradually introduced for non-corporates from 6 April 2017 onwards.  

More recent developments include: 

  • increased corporation tax rates from 19% to 25% since 1 April 2023, largely where taxable profits exceed an initial £50,000 per annum (with a particularly painful marginal rate of 26.5% where taxable profits fall between £50,000 per annum and £250,000 per annum); 

  • increased rates of

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