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Rental Property in a Ltd Company
Tryinghardtosave
Posts: 58 Forumite
in Cutting tax
I have a question. If I lend my company say 100k and then buy a property with the money and then rent that out, what would be the best way to get the rental profits back?
If I charge the Ltd Company interest do I have to then pay tax on the interest I am getting? Or should I just take a dividend and pay the tax there ? or any other options or thoughts.
TIA
If I charge the Ltd Company interest do I have to then pay tax on the interest I am getting? Or should I just take a dividend and pay the tax there ? or any other options or thoughts.
TIA
0
Comments
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Why do you want to use a company to own one property with a modest value? I would expect that the extra costs would be likely to use up whatever tax advantage there might be.0
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If you (Director) lend the company 100k and the company uses that as a mortgage deposit (or outright) to buy a rental property, the most tax efficient way to take cash out (after using up things you may be eligible for like dividend allowance, directors salary, trivial benefits, etc) would be simply for the company to repay your 100k loan to you over time. That's tax free for you though it will be made from after-tax profits for the company.
You could charge the company a reasonable interest if you wish to. The interest would be tax deductible for the company and taxable income for you.
As above, it's unlikely to make sense for a single property, unless your plan is to start with one and then build a portfolio.Tryinghardtosave said:I have a question. If I lend my company say 100k and then buy a property with the money and then rent that out, what would be the best way to get the rental profits back?
If I charge the Ltd Company interest do I have to then pay tax on the interest I am getting? Or should I just take a dividend and pay the tax there ? or any other options or thoughts.
TIA0 -
thanks for the answers, and yes, it would just be a starting point.0
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