Property & Companies

JJH1969

Does anyone know what the advantages are of setting up a limited company for your property business and/or what are the disadvantages of transferring the property to a company at a later date if indeed this is possible?

Monsoon

Stamp Duty is the first thing that springs to mind: payable on transfers between company and individual.

Company will have to prepare full statutory accounts and CT return; individual just has to complete land and property pages on tax return.

Individual has CGT allowances on sale of property, company doesn't. But company may pay a lower rate of tax if the individual is a higher rate taxpayer.

JJH1969

Thanks for this - how much would you charge for setting up a company?

T.C.

Loans and mortgages are more difficult for a limited company.

JJH1969

In what way?

Gem7321

Companies often don't have an established credit rating and if it's an owner-managed company it's likely there is only a small reserve as the reserves have been taken out in dividends which in my experience banks don't like very much.