How to pay less tax on your rental property

In this video I talk through some tax rules for landlords of residential property in the UK, specifically:

- What a tax write off is
- Some common tax write offs landlords can claim, to legally reduce your tax liability
- An alternative structure to consider when purchasing an investment property

Note: It is vital to conduct your own research when buying a property, and to consult a tax advisor to determine the best purchasing options for you. This video is intended to highlight potential differences in tax treatment, it is not a substitute for tax advice.

MY FILMING GEAR:

DISCLAIMER:
This content, and the ideas presented in it, are for education and entertainment purposes only. Kiran does not provide tax or investment advice. The information presented does not consider the financial circumstances of any investor, and therefore may not be suitable for all investors.
Although Kiran is an Accountant, no Accountant-Client relationship is established with the viewer in any way.

As an Amazon Associate I earn from qualifying purchases. The product links in the description are affiliate links. This means if you choose to buy something through one of these links, I may receive a commission on the sale, but it makes no difference to you as a buyer.

[CameronFussner]

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!

[pvelectronics]

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!

[warriorspirit]

You didn't mention transfer of existing properties held in personal name to a ltd company? Could you share some light on this.

[asam]

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?

[altintahiri]

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.

[philipwood]

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.

[jakali]

Kiran's videos are always really informative!

[MBSparks]

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??

[iatanassov]

How much the tax bill would be for individuals that are not on higher tax rate?

[NERDVilleUK]

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.

[michaeli]

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

[wicked-witch-of-the-west]

Could I buy a work van, and declare that even if not in a limited company

[H_Raja]

What about you buying a house to rent with no kitchen in it? If i add kitchen units, is that a right off or capital expense.

[Gibrilswings]

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?

[Wayne-wmwq]

I can think of a good way to pay less do not pay it

[richard_]

I have 4 properties bringing in 40 k. I have always wondered if it is worth setting these up in a company. This is something I'll have to look into.

[Darren]

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.

[leemarsden]

Can you claim for the mortgage fees when you renew the buy to let mortgage? And is it the full amount or 20%

[toffmcman]

yes but you forgot to deduct 12, 750 from 24k for individual as allowance tho

[marton]

What if you never take any income from this company, could yoi run it for ten year then sell it for ££££££