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Where Taxpayers and Advisers Meet

What is profit ? (renting a house within a limited compnay)

paulm7
Posts:3
Joined:Wed Aug 06, 2008 3:04 pm

Postby paulm7 » Tue Jul 01, 2003 2:10 am

If you have a property and rent it out on a buy-to let mortgage , but within a limited company (i.e. liable to corporatuion tax) will "profit" be deemed as the rental income. ...or is this offset by your mortgage payments. i.e. if your rental income equals your mortgage outgoings , is your profit and hence your corporation tax liablity Zero?

Thanks for any help.
Paul.

accountant@uktaxshop
Posts:550
Joined:Wed Aug 06, 2008 3:04 pm

Postby accountant@uktaxshop » Tue Jul 01, 2003 2:40 am

Paul,

You will normally be able to offset the interest portion (not the repayment portion) of your mortgage against rental incomes.

There are also other expenses you can deduct, depending on what type of rental this is. (i.e. commercial, holiday lets or residential)

Just to be aware property within a Ltd co. is not normally treated as a "trade" and is therefore not eligible for the beneficial rates of taper relief for corporate CGT.

If you are having trouble filling in your returns, or are just in the planning stage, I can offer you a very reasonably priced advice and returns service.

James Smith
Chartered Accountant
www.uktaxshop.co.uk
01284 764436

paulm7
Posts:3
Joined:Wed Aug 06, 2008 3:04 pm

Postby paulm7 » Tue Jul 01, 2003 8:31 am

Just planing at this stage, but think i will need some professional help.
Please can you email me direct with an outline of your costs. ....paulm7@bigfoot.co.uk

Basically. I am trying to start a buy - to - let in whatever form is most tax efficient. As i pay 40 % tax, that is why i was looking at a limited company.

I presume CGT is only payable when the property is sold?

I look forward to hearing from you.
Rgds.
Paul.

accountant@uktaxshop
Posts:550
Joined:Wed Aug 06, 2008 3:04 pm

Postby accountant@uktaxshop » Wed Jul 02, 2003 4:50 am

Paul,

I have been trying to email you at the above address this morning, but my ISP keeps rejecting it. Do you have an alternate email address I could use ?

James

John Day
Posts:26
Joined:Wed Aug 06, 2008 3:04 pm

Postby John Day » Mon Jul 07, 2003 7:25 am

Paul
Just a note of caution on the advice given above. Taper relief is not available to limited companies - they continue to obtain relief by way of "indexation" which affords relief based on increases in the RPI.


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