Ltd co for BTL

[delb0y]

Hi folks

Anyone here transfered BTL portfolo into a Limited company for tax purposes?

[TaxationPete]

The transfer of the properties will be deemed a disposal and give rise to CGT on all the properties. Does that not put you off the idea. Regards Peter

[Tipper]

But if he's not long bought it and prices have fallen..........?

Maybe the future view may be more important than what's gone before.

[Telometer]

And a good chance of paying 4% SDLT as well.

If your properties are not standing at a gain, there is likely to be no CGT to pay. If they are standing at a loss then it would almost certainly be foolish as you would end up paying tax on the uplift back to .

Your profits would be subject to taxation at 21% on the first 300,000; 29.75% on the next 1.2m and 28% on any further balance.

HOWEVER, when you paid yourself a dividend, that dividend would be subject to a further 25% income tax. Thus giving yourself an effective tax rate of between 40.75%and 47%. If you plan to roll the money up in the company, then yes, there is a tax saving.

Administration fees will be painful as well.

If you enjoy throwing money away, please send me a cheque! It'll be less effort than incorporation.

[delb0y]

Thanks for the advice ..not much point in it

[Gordon999]

I have noticed that dividend warrants from listed companies show a tax credit of 20%. So if you pay tax at 20% rate , there is no further tax to pay.

Does this tax credit not apply to a dividend paid by your own company ?

[Telometer]

I have noticed that dividend warrants from listed companies show a tax credit of 20%. So if you pay tax at 20% rate , there is no further tax to pay.

Does this tax credit not apply to a dividend paid by your own company ?

It does indeed. But the company itself has paid tax at 21%, which is higher than 20%................