Partnering – Tax Advantages

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After just one year of partnering with Property118 you could be free of restrictions on finance cost relief and roll your capital gains into shares in your own property investment company.

Eligible business partners will be able to achieve all of the above without incurring CGT, Stamp Duty (LBTT in Scotland) or having to refinance.

Many landlords have historically acquired properties which are in high demand by owner occupiers and which have appreciated significantly in value. However, in some cases the rental yields on these properties are now comparatively low. Ordinarily, selling these properties would result in large amounts of capital gains tax falling due. The alternative of refinancing such properties, to release cash for further investments, is becoming increasing difficult due to new lending rules imposed by the PRA. Partnering with Property118 provides opportunities for such properties to be sold immediately after incorporation, at full market value, and to utilise all net sale proceeds to pay down debt or for reinvestment without tax consequences.

Once your business is incorporated, properties also benefit from indexation allowances for capital gain calculations.

If your mortgage balances are less than you paid for your properties an opportunity may also exist to withdraw a tax free lump sum from the business.

In many cases (but not all) the total amount of tax payable, even if you withdraw 100% of profits as dividends, can be significantly lower than the amount you would otherwise pay as an unincorporated landlord.

Eligibility criteria does apply of course.

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