rental income through ltd company

rental income through ltd company

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I have a client who approached me with the idea of opening a ltd company for his BTL portfolio to be rented out in bulk to his newly incorporated ltd company and charging the rent at slightly above his costs (he is a high rate tax payer). I am inclined to think that this is feasible. am I missing something

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By tonyh
24th Oct 2013 17:31

maybe

If the company is leasing properties from client you need to have documents drawn up properly pref by solicitor.

If client is considering transferring properties into ltd co,

You need to consider capital gains and stamp duty on transfer in and out of ltd co,

Costs of running company e.g. revaluations on regular basis.

Any mortgage or borrowings on properties.

Can he afford not to withdraw rent otherwise whole thing is waste of time.

Loss of capital gains exemption on sale of properties.

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By [email protected]
26th Nov 2013 11:53

the idea of the client is

that the client rents out the property to the ltd company who in turn sublets to third party on ast. the rental to ltd company would be at the clients cost so that client does not make loss/gain on the BTL portfolio and company would sublet at market rate so any profit would be taxed at 20% corporation tax. as the client does not need the money profits from ltd company will not be drawn down as dividends

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