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maggie b

Tax information : Ltd Co vs personal

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Hello there, 


Can you please recommend some accountants that you have used. 


I want advice on whether to set up a limited company. 


Plan to buy and rent out properties with my partner, he is a high tax earner and I am unemployed. We would like to be able to take out income from our investment regularly. What is the best set up for us so that we avoid being taxed out of profit! 

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You have 2000gbp tax free as a dividend when in a company so for you and your partner that would equate to 4000gbp per year tax free. 


Under a company, you will be liable to 20% in tax. 

However, you personally (under your own name) are allowed up to 11000gpb tax-free. Your partner not so much. 


If you are in it for the long game, then set up a company and educate your self. 

Home Equity Gains Group 

Property Investor & Developer

http://www.hegg.info ;)

https://www.instagram.com/hegg_ltd/?hl=en B)

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Hi Margaret,


As with most issues like this, the main starting point for these decisions would be to meet with an accountant who understands property taxes. They will be able to look at the bigger picture and give you advice tailored to your situation.


However, I have listed some general points here.


One of the main reasons people are incorporation is Section 24, the restriction of mortgage interest relief. As such this kicks in when your income reaches higher rate. Therefore your partner would suffer from these higher taxes if he receives any property income. One way round this would be to have the properties in your name though you may experience problems obtaining a mortgage as you are unemployed. A broker would be able to give you more advice on this.


Another issue to consider is the long term plans. If you buy the properties personally then later want to move them to a company your will be liable to pay stamp duty and potentially capital gains tax. Proper thought needs to be give to how you would structure your purchase.


There are also considerations around inheritance tax that are best planned for at the beginning.


Hope this helps a bit but it is hard to give any actual advice without knowing the whole situation.








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