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david slater

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About david slater

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    Established member

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Profile Information

  • Location
  • Areas I invest in
    Oxfordshire (Bicester) and SE Birmingham. Investigating investing in Cumbria.
  • About me
    I am a property investor with a small but growing portfolio in Bicester and SE Birmingham. I am also a chartered accountant and am running my own practice which focuses on looking looks after the needs of property investors.
  • Property investment interests
  • My skills
    Accounting, refurbishments
  • My goals
    Build up portfolio to give me options about how I choose to spend my time and provide a legacy to my children.
  • Interests outside property
    Keeping fit and training and racing in triathlons (when not cancelled due to COVID-19!).

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  1. Would normally to sell the property or sell a property in the portfolio to pay down debt on other properties. You could also remortgage the property at the end of the term.
  2. You need to either be able to buy the property at bigger enough discount or be able to add enough value to make the deal stack up when factoring in all of your costs inc SDLT. Easier said than done I think but there are investors who appear to be making profit on flips.
  3. No you would need to pay corporation tax on the profit. CT is currently 19% (subject that what the budget brings next week). simplified example of losses in a property business. Year 1. Rent £10,000 Allowable Revenue expenses (inc property maintenance, mortgage interest) £5,000 Refurbishment revenue expenses £15,000 Profit/(Loss) (£10,000) No corporation tax is paid as you made a loss of £10,000 which is carried forward to year 2. Year 2. Rent £10,000 Allowable Revenue expenses (inc property maintenance, mortgage interest) £5,000
  4. You need to distinguish between interest payments and repayment of the capital that you owe the bank. In a limited company mortgage interest - ie the amount you pay to service the debt each month, is an allowable revenue expense. This will reduce your profits meaning you will pay less corporation tax Repayment of the loan to reduce the capital is treated differently, it is not an expense but rather you are reducing the debt by repaying some of the capital you owe. Repaying the debt will not mean you don't have to pay Corporation Tax if you have made a profit. My most
  5. Unfortunately you won't be able to avoid paying stamp duty. Look at SDLT at the higher rate as being the cost of doing business when investing in property. There are some occasions when the property is empty or uninhabitable that you wont be required to pay the additional rate of SDLT or rather you might pay it and then be able to apply for a refund. Flips in your own name may not be tax efficient as If you buy with the intention of selling on for a profit then it is deemed a trade rather than investment as you you will pay income tax and national insurance rather than capital gains tax.
  6. Do you own any property currently and are you planning on purchasing through a limited company?
  7. Anything complex will also result in higher accounting fees.
  8. When you completed your tax return, presumably through the HMRC self assessment portal? You should be able to see your SA302 which breaks down how your tax bill has been calculated. If needs be HMRC should be able to send you a copy by post but it should be available online. If you scroll down it will state income tax due and below that should be 'minus relief for finance costs' where the amount should be equal to 20% of 783. The relief is then used to calculate the amount of overall tax you owe to HMRC. Note it is NOT used to arrive at the amount of profit from UK land and property
  9. Hi Nick. I am not sure how lenders would feel about a property investing company being owned 100% by a trading company/companies. Assuming you are wanting to use mortgage finance then it will be a good idea to talk to a broker first before you proceed.
  10. You are going to have to pay out fees initially unfortunately. Remember that the company is a separate legal entity from you as an individual so there is more to it than you might think. It might be worth speaking to some different solicitors though, ideally ones that have dealt with this sort of transaction before. If it is 5 properties you are moving into a company then it might be possible that you are eligible to claim incorporation relief to reduce your CGT liability.
  11. Hayda, no sight of the info you are referring to but happy to try and help you if I can.
  12. The relief for finance costs is applied against the income tax you are going to be charged for that tax year. Did you have any additional income other than property?
  13. LLPs are transparent from a tax perspective which means that the partners get taxed at their marginal rate. This will probably work out well for you but not so well for your partner who will pay higher rate tax. Limited company's pay corporation tax at 19% but then you may pay personal tax if you look to extract profits. If you were looking to reinvest profits and didn't need to access them to live off then a company might be a good option.
  14. It is technically a sale of the property from you personally to your company at market value. You mentioned SDLT, CGT and ERC costs. There will also be the usual frictional costs associated with a sale and purchase such as solicitor fees. You should ensure the costs are going to justify the potential tax savings. If you have sufficient equity in the properties then you might be able to structure the purchase in a way where you gift equity to the company via directors loan and therefore you wouldn't need a cash deposit.
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