Retired married clients have one rental property held in joint names worth approx 250,000 producing a total rental income of around 10,000. Considering buying a second property for around 150,000 with potential annual rental profit approx 8,000.
He is a higher rate tax payer (good pension) she is just above the basic rate threshold. There are no mortgages involved so no interest costs.
They have asked if there is anything to be gained from putting the properties into a Limited Company.
I have explained that transferring the first property in could lead to CGT and stamp duty on the transfer.
As there is no issue with interest tax relief I can't see any great point transferring the first property into a company or buying the second property through a company.
It seems the best advice would be for the second property to be purchased in the wife's name and the first one left where it is.
I just wonder if I am missing something.