E-BOOK
Personal or Company: the Landlord’s Decision
Eight chapters on the structure decision, priced honestly in both directions. Chapter two is the annual saving. Chapter three is what it costs to collect it, and it is the chapter that changes most people’s minds. Read them in that order before anyone incorporates anything.
- Eight chapters, three tables, the same worked landlord as the rest of the hub
- The break-even worked in years, not asserted in adjectives
- The five conditions, of which four have to be true
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Who this e-book is for
Landlords being told a company would save them tax, who want the whole price of that saving on one page before they pay for advice, and the honest cases where it genuinely works.
You have seen the headline saving and it looks obvious
It is real: a company deducts its interest in full, so on the worked figures it pays £950 of corporation tax where the individual pays £3,946, a saving of £2,996 a year. Then chapter three prices the move. Selling a £300,000 property to your own company costs about £20,000 of stamp duty at the surcharge rate and £13,364 of capital gains tax, which is eleven years of the saving before you are ahead.
You are planning to live on the rent
Then the company probably loses, and chapter four explains why. Corporation tax is only the first layer; dividends out are taxed again at 10.75, 35.75 or 39.35 per cent, and drawing everything usually cancels the saving. A company suits a landlord building a portfolio out of retained rent, not one spending it.
You assume the company borrows on the same terms you do
Chapter five is the unglamorous one that moves real money. Company buy to let means fewer lenders, higher rates, larger fees and a personal guarantee, so the limited liability is thinner than it sounds. Half a point of rate on a £200,000 mortgage is £1,000 a year, a third of the headline saving gone before anything else happens.
FACTS
When it genuinely works
Buying new rather than moving what you own, heavily mortgaged, higher or additional rate, building rather than drawing, and planning to pass the portfolio on. Four of those five have to be true before the arithmetic works. One of them on its own rarely does.
8 chapters
Three tables
11 years
To break even on moving a £300,000 property
FACTS
The three questions that settle most cases
Are you buying, or moving something you already own? Will you draw the profit or leave it? And how long will you hold it? If the break-even is eleven years and you expect to sell in six, the arithmetic has already answered. Incorporation relief and partnership structures exist, and the book names them as fact specific rather than promising them.