Is it possible to avoid the 40% tax on rental profits?
I am nearing completion on my first BTL. I am in the 40% tax band and therefore I will have to pay 40% tax on my rental income.
The property is solely in my name but is it possible for the rent to be paid to my wife as she gets taxed at 20%. I’m guessing this isn’t possible or everyone would be doing it but wanted to pose the question.
The other option I’m looking at is forming a company so I only have to pay corporation tax saving me around 20%. Again, is this possible as the mortgage is in my name and under the leasehold agreement I’m not allowed to sub-let?
Any advice or other ideas so I’m not ‘losing’40% of my rental profit would be appreciated.
Thanks,
Mark Harwood
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Landlord & tenant dispute
Member Since August 2014 - Comments: 1
9:46 AM, 8th March 2016, About 10 years ago
Reply to the comment left by “shakeel ahmad” at “09/06/2015 – 14:11“:
Can you please explain your comment using an example, How it will work.
Member Since April 2017 - Comments: 6
10:01 AM, 5th September 2017, About 9 years ago
I just happened across this post and although I can’t really answer the exact ins and outs I did happen across an article the other day which said something about how SDLT doesn’t apply to commercial properties which are below £150,000, which can save a fairly high percentage for you (here’s the article if you wanted to read more: https://www.emergingproperty.co.uk/insights/how-can-investment-property-reduce-tax/ ) I think in general though it is very much down to personal circumstance, each property and situation is different. If you’re unsure I’d definitely seek further advice on the subject!