The issue is that either the renter or the owner must in some way pay insurance and property taxes if they want a "permanent roof" with utilities like electricity, gas and water. Because of this, many people-at least in California, where I currently reside-are living in tents. No taxes, rent, mortgages, or insurance. The number of people who tell me they live in their car that I meet amazes me. Its crazy out here!
It’s getting wild by the day. The prices of homes are quite ridiculous and Mortgage prices has been skyrocketing on a roll(currently over 7%). Sometimes i wonder if to just invest my spare cash into the stock market and wait for a housing crash or just go ahead to buy a home anyways.
I get such worries too. I'm 50 and retiring early. Already worried of the future and where its headed, especially in terms of financies and how to get by. I'm also considering making my first investment in the stock market, but how can I do so given that the market has been in a mess for the majority of the year?
For you to grow your portfolio in today's market, you really need to be coachable and willing to get off your high horses. I for example, have managed to grow mine from $150k to 300% of my initial deposit within the past few years just by copying trades from a broker that has better skillset and technical know-how than me.
There are a handful of experts in the field. I've experimented with a few over the past years, but I've stuck with Annette Marie Holt for about five years now, and her performance has been consistently impressive. She’s quite known in her field, look-her up.
Dear Kiran, I think you missed the most important points: With a Ltd Co, you can hold the retained profits in the company and take them out later as dividends when your earned income drops, like in retirement. Ltd co gives you the control of when you pay the tax to get the money out of your company. Another key point is that the company can make employer pension payments to completely mitigate corp tax, and send the 'profits' to a safe haven of a SIPP. No 19% CT, no dividend or income tax. And the money in your SIPP can be accessed for as little as 0% tax (by taking £16,700 pa.) up to 15% (1/4 tax free, 3/4 at 20%) Unless you are a mega spender and want to pay higher rate tax in retirement!
I’ve been looking for a video that explains this exact thing, especially the option for my Ltd Co to rent my house from me and sublet, it’s be great to redirect the profits to a pension too. Can you recommend any resources?
You might want to look at the rules on pension contributions such as the annual allowance. With high earners your suggestion is unlikely to be as straightforward as you make out.
Very helpful, thank you. But would you be able to do an episode explaining the pros and cons when it comes to selling a BTL under a Ltd company vs individual?
Limited and personal mortgage are also different.So they can’t be both 12K Other cost need to take into account ,like accounting Other way would be :Adding partner if he/she earn less than higher tax rate threshold. This video can be quite long to complete You may need to make one other video on this.
Good video but the Ltd vs personal tax illustration is misleading. On the LTD side of the example, Income tax is shown to be paid after Corp tax. May explain that better i.e. income via dividends. Stating income tax makes one think this is PAYE from the LTD. PAYE is paid prior to corp tax calculations for the LTD.
Lending Finance is very expensive due to lending fee costs and higher interest rates due to lack of competition in commercial finance. If you could cover this it would be awesome.
What about transferring a privately owned property into a LTD? Would I effectively be selling the property to the Ltd and still have to pay CGT ect ect??
@@bbsaid218 If the company is a trading company run by the beneficiary of your will then you can get 100% business property relief and avoid paying IHT...this doesn't work a rental property
Correct, as I understand it the transfer would be a taxable event and HMRC will want their flesh on any taxable gains over the annual allowance as described by Transfer Price (a market-led number) minus Sum Buying and Additional Capital Costs (incl SDLT - and that new shower!) less any Selling costs. Giving the transfer is of an asset, this gain would likely attract the punitive rate of CGT rates, viz., 18% (for base rate taxpayers) and 24% (for additional rate taxpayers). Once in a Ltd company package corp tax is 19% (up to £50,000 net of tax profit annually) and levied on after profits after all costs (incl full interest cost relief). A company of two directors can pay each director up to £12,750 with neither personal income tax nor either employer and employer national insurance ex gratia for both parties. Thereafter, at the board's discretion, the company may pay dividends if it is legal to do so. These dividends attract lower rates of tax than the alternative (e.g., income from PAYE or interest). After a nominal annual allowance, the dividends tax rates are: Basic rate (8.75%), Higher rate (33.75%), and Additional rate (39.35%). I am undecided between the pros and cons of exiting by (a) selling the asset and liquidating the limited company, or (b) selling all one's limited company shares. Both attract CGT in their own ways. NB: This is an unqualified opinion. The HRMC code is voluminous and so advice that is specific to the individual and their circumstances should ultimately be sought from an experienced, qualified accountant.
its going to cost you arms and legs as you have to sell those properties to your company so you will have to pay stamp duty at market value and CGT . its complicated but its doable through PPR
I replaced a roof on my BTL property. It was £8000. Can I claim this back as a capital expense reducing my CGT, ( I’m thinking of selling the property) or do I claim it back as a cost against rental income? What is the best way to lower my tax liability? Thank you
How does this work if you are looking to invest in properties abroad through a branch company.. are you aware? and do ltd companies benefit from tax trreaties to avoid double taxation?
Thanks for your video. Im close to the 40% tax bracket. Can i buy a rental with my wife and just put all the income in my wifes name. Shes well below the 40% tax bracket.
i dont get how this is so difficult, get a prepaid card, get the tenant to send the rent into that account, and spend from there, pay no tax, since government cant see those cards. why is anyone faffing about this crap
Nice thought, until they don’t pay their rent, won’t get out, register the property in their name, claim you forced them, say the money was a gift, destroy the place, claim Poverty, say you told them it was free, try to remortgage in their own name, get 15 dogs… etc etc All of these mean you are cooked!!! Not worth it.
@@Trina8 who is telling the tenant the bank account is anything but a normal account. All this was just a ridiculous scare mongering. all of that crap can be done even if the tenant is paying into a business bank account.
@@jdcarmad google, prepaid cards with sort code and ACC number, they act as a normal bank accounts, but they're not banks, but they are regulated by FCA, anyway get the money transferred there, and take cash out. since these accounts are not banks they never go on your credit file, so no one not even hmrc can see you have an account there.
For working hard, saving and looking after their retirement and descendents!. Usch comments are a joke and made by people people to lazy to break out of modern day slavery system by going the extra mile and sacrificing their health, wealth and short term happiness to break free... All the successive master running the country are landlords and you can either learn and play catch up or slumber to defeat and blame the world and everyone else for being controlled
