Property Tax Planning: General

Whether you own property for investment purposes or as part of a development project, having this in the right structure is crucial to minimising the overall tax costs.

When looking at holding rental properties on a long-term basis having these within a company may well prove to be beneficial due to the lower rates of corporation tax as opposed to higher personal tax rates.

If you are holding investment property for the short term then it may well be better to hold this personally so that use can be made of the capital gains tax allowances that are available to individuals but not to companies.

If you are considering a development project then it is always a good idea to have an exit strategy in mind before the project gets underway. This may be via liquidation or perhaps the disposal proceeds will be reinvested in further projects.  Either way, tax planning plays an important part to maximise your proceeds.

There are many taxes involved with property, not only Income Tax, Corporation Tax and Capital Gains Tax, but also Stamp Duty Land Tax, the relatively new Annual Tax on Enveloped Dwellings and possibly VAT depending on your circumstances.

With the potentially rising property market there are many new landlords who need to decide how best to approach their new rental activity. Gritstone are well placed to assist with this planning and advise how best to structure any property business going forward.