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Rent income into Ltd Company

umarnazar
Posts: 40 Forumite

Hi,
Could someone be able to guide me on how to move my rental income from my BTL to be paid to my limited company? BTL is in my name.
The reason I am asking is that I have a 40% tax on my primary income, and I have to pay a 40% tax on the rental income on my self-assessment.
Wonder if I could use my Ltd Company to reduce the tax return if possible.
Thanks
Could someone be able to guide me on how to move my rental income from my BTL to be paid to my limited company? BTL is in my name.
The reason I am asking is that I have a 40% tax on my primary income, and I have to pay a 40% tax on the rental income on my self-assessment.
Wonder if I could use my Ltd Company to reduce the tax return if possible.
Thanks
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Comments
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umarnazar said:Hi,
Could someone be able to guide me on how to move my rental income from my BTL to be paid to my limited company? BTL is in my name.
The reason I am asking is that I have a 40% tax on my primary income, and I have to pay a 40% tax on the rental income on my self-assessment.
Wonder if I could use my Ltd Company to reduce the tax return if possible.
Thanks
(a) If there is a lender, dealing with the borrowing, usually by the company taking on a new loan.
(b) Capital gains tax on the disposal by you of the property to the company.
(c) Stamp duty land tax payable by the company.
These issues are topical, as HMRC has recently issued "Spotlight 63" about what appears to be ineffective attempted avoidance of taxes, including capital gains tax. There is a write up about the issues here: https://www.taxpolicy.org.uk/2023/10/05/lt4f/0 -
the ltd will own the property then not youDon't put your trust into an Experian score - it is not a number any bank will ever use & it is generally a waste of money to purchase it. They are also selling you insurance you dont need.1
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Can I not just use Ltd Company to take rents , avoiding transferring it to Ltd Company?0
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umarnazar said:Can I not just use Ltd Company to take rents , avoiding transferring it to Ltd Company?2
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I assume the answer is no but could the OP use a ltd company to manage the property and pay say 10% into the ltd company? Not sure they’d be mush benefit but wondering if legsl0
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If your wife is not also a HTR payer you could transfer some of equity to her.0
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umarnazar said:Can I not just use Ltd Company to take rents , avoiding transferring it to Ltd Company?
Besides, even if the company earned the income (post property transfer), you then have to get the income out of the company, so you pay dividend / income tax again.steve866 said:I assume the answer is no but could the OP use a ltd company to manage the property and pay say 10% into the ltd company? Not sure they’d be mush benefit but wondering if legsl
Sure, the ltd company would physically receive the rent, but then pass it on to OP. Tax isn't due just at the point of physically receiving the money, but rather its based on who actually earns it. Same as if a 3rd party letting agent managed the property, its still the landlord's income tax liability.0 -
I have heard people stating you can lease the property to your ltd company.0
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Have you actually done the sums including Corporation Tax and then income tax when you take money out of the Comapany via salary and/or dividends. How exactly do you think you would be saving money even if it proves possible to do so?
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It is not possible to simply take the rental income into the Ltd Co.
It is possible to transfer the property to the Ltd Co. such that the Ltd Co. can then receive the rental income. There are different ways this may be achieved, all have costs associated with them (which may be significant). There remains a need to transfer the income back to the OP at some point, which will have tax implications at that time.
If the OP seeks to avoid higher rate income tax by delaying the rental income within the Ltd Co., then a similar outcome may be possible if the OP can increase pension contributions from their earned income and then use the rental income to back-fill that for current expenditure. This will require that the delayed income is held until retirement (age 55 earliest). There are restrictions on maximum amounts that can be contributed to pension.0
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