starting up new business

mandm65

Hi guys
Thinking of starting up my own business, trying to make good use of the redundancy money.
I am thinking of starting a property management business from home and perhaps looking further move into property development at a later stage.
One of the driving factor for the property management business is that we have couple of buy to let properties so have ‘some’ property management experience and would like to build on that.
My question is would there be any advantage if we were to bring our buy to lets under our newly formed company or its best to leave them as they are?
I also considering to educate myself by attending property management course, although I appreciate no formal qualification required, any pointers would be appreciated.
Cheers

CKhalvashi

If you're a 20% taxpayer or the BTLs would push you into this bracket, then my advice would be to sign a management contract for the BTLs at a market rate (10-12%), which will fund your startup costs in a tax efficient manner.

The 20% corporation tax will be fully reclaimable against any marketing cost the business faces.

If you're still higher rate, then you should seek advice tailored to your circumstances.

Whether this is possible as an owner/director someone will be able to advise soon, however I know of others that have done so as employees, so can't see how as a director it will be different.

mandm65

Thanks CKhalvashi for your input.
Although i dont have a job yet but you are correct to identify that BTLs would push me into 20% bracket.
Do i need to change my existing contract with the tenants?
Yep i look forward to receive others advise soon.

CKhalvashi

mandm65 wrote: »

Do i need to change my existing contract with the tenants?

You'd need to look at what the contract says.

Presumably there's a right to assign to a management agency, so you'd have to give notice of this in any event. You'd also need to register as a lettings agency and join an ombudsman scheme which costs around £150, however if you plan carefully, you should be able to save more than this.

You need to look at your contracts, and ideally seek some advice on how is best to do it.