Sarah Bradford looks at some of the ‘pros’ and ‘cons’ of operating a property business through a limited company.
Property companies have increased in popularity in recent years in response to a raft of tax changes reducing the attractiveness of an unincorporated property business.
While property companies do have advantages, there are disadvantages too.
Where a property business is operated through a limited company, the profits are chargeable to corporation tax. This will generally be advantageous, as the rates of corporation tax are lower than the rates of income tax.
Since 1 April 2023, the rate at which a company pays corporation tax depends on the level of its profits. Where profits are below the lower profits limit (set at £50,000 for a company with no associates), corporation tax is payable at