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Tax Planning

Unfair UK Taxation of privately owned rental PROPERTY businesses

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All businesses in the UK are subjected to various forms of Taxation. However, property rental businesses, especially privately owned ones, have a much tougher deal when it comes to tax.

For example: –

Private car rental business owners can offset 100% of finance costs against rental income but private rental property business owners cannot

Private car rental business owners can sell their business and roll 100% of the sale proceeds into almost any other form of business to defer capital gains tax, but private rental property business owners cannot. Instead, private rental property business owners must first pay Capital Gains Tax and can then only invest whatever is left over.

Private car rental business owners can gift their business to the next generation without taxation consequences before or after death without tax consequences, but rental property business owners cannot. Instead they have to pay Capital Gains Tax if they do this whilst they are still alive and Inheritance Tax after they have died. If they gift their business and then die within three years they could actually end up paying both the full amount of Capital Gains Tax AND Inheritance Tax.

The only reason I used a car rental business as a basis for the comparison to privately owned property rental business is that they are both rental businesses. However, the rules applied to car rental businesses also apply to every other form of business other than rental property. How unfair is that?

I have written several blogs showing further unfairness. Another one shows the income tax differences between private housing providers and private hoteliers.  You can read that article via THIS LINK.

Below are links to a couple more: –

Why Might UK Landlords Consider a Partnership?

LLP structure reduces landlords tax bill by 85% – CASE STUDY

Forget waiting for the Government to level up the playing field and make things easier for you, that’s highly unlikely to happen in our lifetimes.

However, we have 10 tax consultants and five barristers waiting to help you navigate the complex legislation and processes to substantially improve your position from now on, so what are you waiting for?

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