Tax and Succession strategies for Property Portfolio Owners / Landlords.
Privately rented accommodation is vital to the UK property sector, with over 9.3 million households renting their homes. Over 5 million are rented from private landlords. And yet, the Government seems determined to make being a Landlord as taxing as possible. *
As any Accountant will know, tax reliefs on mortgage payments are now limited to the basic rate unless the properties are commercial or held within a limited company.
Many landlords work hard to build up a substantial portfolio with a view to it providing income and security for themselves and their families in the years ahead.
HMRC, however, have other plans.
Property portfolios are classed as investment businesses NOT trading businesses and therefore do not qualify for Business Relief from Inheritance Tax as a trading business might.
Upon death, the whole portfolio may be subject to 40% Tax payable within six months of death.
It can possibly be paid over 10 years, with the addition of a varying interest rate applied by HMRC, however, where the instalments are greater than the rental income (after other taxes and expenses) it may necessitate a property sale.
*Source – Housing: England & Wales Census 2021
“With the introduction of punitive income tax penalties on Landlords, we needed to take our property business to the next stage and that involved setting up a Limited Company. Our Accountant introduced me and my wife to Oldgate Trustees who guided us through the minefield of tax implications and got us from where we were, to running our business through a Limited Company.
The result was immediate substantial Tax savings and the implementation of a bespoke strategy to safeguard the company shares for our children and grandchildren and reduce our exposure to Inheritance Tax in future. It feels good to know my hard work and legacy will provide security for my family for many years to come.”
Stuart and Helen of Oldgate Trustees have continued to assist my family over recent years and are always at the end of the phone when we need them.
R W
We help private landlords restructure their portfolio businesses to maximise tax opportunities throughout their lifetime and mitigate Inheritance Tax on death.