June 10, 2021

At McDougall McQueen we work with a number of investor clients, helping them secure their property portfolio, and for the seasoned investor, we are currently seeing a trend in buying properties within a company structure rather than as individuals.

Getting the ownership structure right can make a significant difference to the amount of tax you pay, potentially making it a more lucrative investment, so it is important to discuss your business strategy with us at the outset.

Investing in property via a company structure  rather than an as an individual can have many benefits such as:

  • Mortgage interest is deductible – as of 6th April 2020, individual higher rate tax paying Landlords have progressively lost valuable mortgage interest relief as an allowable expense for tax purposes, however it currently  continues to be allowable for companies that hold such BTL property;
  • If properties are held within a company, the profits will be liable for Corporation Tax instead of Income Tax (Corporation Tax tends to be about half of the higher rate of Income Tax) allowing you to grow the company faster (provided profits are not taken out via dividends);
  • Property held within a company can provide more options when it comes to planning for Inheritance Tax;
  • It can be easier to transfer the assets underlying the shares to your beneficiaries either during your lifetime or on death.

McDougall McQueen act for a number of investor clients setting up business structures which can be hugely advantageous for their property strategy, such as incorporating a Partnership (transfer of the whole of the assets of a Partnership into a Company which can sometimes be done without paying LBTT and ADS).

It is often easier to obtain finance initially by buying property in an individual name rather than a company and there are additional costs to consider if you are going to invest in property through a company, therefore it is important to take advice and discuss your long term strategy with a specialist IFA before starting out.

At McDougall McQueen we work with a number of investor clients and offer a full end-to-end solution for property investors, negotiating and then managing extensive property portfolios, so if you are looking for help delivering your property investment objectives, then please get in touch.