Set up company to rent properties

beta2

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Hi

I currently have three apartments which I rent out, I don’t have any debt on them. a few people have suggested to me that I would be better off to set up a ltd company and transfer the apartments to the new company, then it would be more tax efficient.
Just wondering if anyone has experience of doing this? I’ll engage my accounts to structure it all, just wondering what people’s thoughts were on this.

cheers
 
Few thoughts which crossed my mind,
1 - You will pay CGT if the transfer value is higher than what you paid for the properties
2 - The Company will pay stamp duty on purchasing the properties.
3 - The Company needs to have money to buy those properties from you.
 
I have no expertise on this but the advice on AAM has always been that this doesn't make much sense unless you are doing it at very large scale and can access finance.
 
I struggle to see the logic of this.

- CGT on the transfer
- Stamp duty
- 40% tax in the company (incl surcharge)
- CGT for the company if it sells
- Then CGT or income tax on the way out
 
I would agree with Gordon. It makes no financial sense and the taxes on rental profits within the company are even higher than 40% because of the surcharge.
 
I would agree with Gordon. It makes no financial sense and the taxes on rental profits within the company are even higher than 40% because of the surcharge.

No, I was including the surcharge to get to 40% (i.e. 25% corporation tax plus effective 15% surcharge).
 
I will have a chat with the accountant in the next couple of weeks and report back. I agree with the points raised here, so not sure why some think it is advantageous.

I guess if I plan to start adding more properties it might make sense so I can build up a fund more quickly to buy additional units.
 
It never makes any sense under Irish tax.

People who suggest it have sometimes read an American or UK "get rich quick" book where it might make sense.

The question is often asked on Askaboutmoney.

And the other question often asked is "I have a property inside a limited company - how can I get it out?"

Brendan
 
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