Options for Property Rental
When you are looking at renting a property, there are many factors to consider. The approach you should take depends on your current situation as this can be very relevant, especially where factors such as tax are concerned.
This month’s blog at Clifton-Crick Sharp & Co. looks at the many options for property rental. For more information, call us on .
The Pros of Owning a Property Through a Company
If you do choose to purchase your property via a limited company, all taxation of profit will be subject to corporation tax, which currently sits at 19%. Therefore, if you are a higher rate taxpayer you will see significant savings on your tax as a result. Furthermore, this could be a good way of minimising inheritance tax when the time comes to pass the property to the next generation , if you so desire.
This can be achieved by making any heirs shareholders in your company, bypassing taxation which would otherwise apply to non-shareholder inheritance.
The Cons of Owning a Property Through a Company
However, any money saved via this approach can be negated by the running costs of your limited company, depending on the size of your operation etc. as well as the initial set up costs, which again can be substantial.
Furthermore, it is common practice for conveyancers to apply additional fees for limited companies due to extra setup processes including background checks on the company.
Splitting Rent on Shared Property via Form 17
This applies to any type of property so long as it is held jointly and is applicable if you feel your split of the income does not in fact reflect your actual share of ownership.
To successfully apply for Form 17, you will need to show decisive evidence that your beneficial interests are not consistent with those of the other inhabitant of the property.
Tax Advantages of Furnished Holiday Lettings
Compared to ‘buy-to-let’ properties, any landlord may find that advertising their property as a Furnished Holiday Let increases tax efficiency, particularly in areas which are popular for their provision of holiday accommodation.
This is achievable by simply furnishing your property to a ‘luxury standard’ which will allow you to increase your rental income meaning you can then deduct the initial cost of furnishing the property from your pre-tax profits. However, this is non-applicable to any property you will rent long term to a specific tenant, as this is more aligned to a buy-to-let rental than a holiday rental.
Contact Us
For more information about options for property rental, please don’t hesitate to contact Clifton-Crick Sharp & Co. Call our team on .Alternatively, you can make an enquiry through our contact form.
