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22 September 2015
Can property income be sheltered in a company without a change of ownership?
Despite recent changes to the taxation of dividend income and with corporation tax rates low but income tax rates high by comparison the question of whether to conduct a property rental business through a limited company remains very topical.
I act on behalf of some clients for whom property investment forms the bulk of their retirement planning. The prospect of avoiding 45% tax on accumulated rental profits is attractive but the stumbling block inevitably is the potential capital gains tax liability if the properties are transferred to the company and incorporation relief is denied. There is also the usual issue about double taxation on disposal of the properties and extraction of the funds.
Is it possible for a company to carry on the rental business while the director retains ownership of the property? My first...
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