What problems am I going to face as a retired landlord?

solidpro

Hi
I own a limited company. 
Thanks everyone...

anselld

Companies pay Corporation Tax on the capital gain, not CGT and there are no allowances.  You would also be taxed on the withdrawal of the cash via salary, dividends or winding up.

Who knows what rates will apply in 20 years time and the advantage/disadvantage of incorporation vs personal ownership.

One advantage available currently under Ltd Co is that you can make pension contributions from the Company whereas you could not use personal rental income for that purpose.  You can also pay yourself enough income to get NI credits if you decide to retire early with insufficient years for full state pension.

silvercar

Keep the money in the company, there is no CGT on death!
Drip feed the money out each year as tax efficiently as possible, PAYE, pensions and dividends using your allowances.

p00hsticks

silvercar said:

Keep the money in the company, there is no CGT on death!

I don't understand this comment. As anselld says above, companies don't pay CGT. And a company doesn't die just because the existing owner does - someone else inherits the company.

steampowered

If you sold the properties the cash would be in the company; you would need to take it out of the company somehow to get it.

One immediate thought I have is whether this is really the best way of saving for retirement. For example are you missing out on tax relief you would be getting if investing into a pension instead (this is a massive incentive especially if you are a higher rate tax payer). It's worth thinking about.

The other risk you are running is non-payment by the tenants or damage to the properties. You can mitigate against this by having savings or insurance.

solidpro

steampowered said:

One immediate thought I have is whether this is really the best way of saving for retirement. For example are you missing out on tax relief you would be getting if investing into a pension instead (this is a massive incentive especially if you are a higher rate tax payer). It's worth thinking about.

I already do the maximum pension contribution (before hitting the higher tax threshold) to me and my partner from another company we own, so we are putting a lot into a (closely managed) private pension each year. We basically try and split our income fairly equally 3 ways - 1/3 into property, 1/3 into pension (which in turn goes into various different investments) and 1/3 into cash savings (via dividend and £12k salary each) spread around a multitude of accounts that try to get as close to 2% p/a as possible and other smaller assets - some gold, platinum or silver and some bits of collectable art as an investment...
Sounds like we're doing the right thing....

theartfullodger

Taxes will be due based on the then tax rules.  Since you, me, anyone else has no idea what they will be any estimated answer is but a guess.

F K what will happen after Br*x*t & Covid-19 anyway.  Me, I'll just be pleased to still be alive & not starving..