Since Section 24 tax changes removed mortgage interest relief for individual landlords, many investors have turned to limited company structures. But is it right for you? This guide weighs up the pros, cons and practical considerations.
Advantages
- • Full mortgage interest deduction against profits
- • Corporation tax at 25% vs up to 45% income tax
- • Flexibility in profit extraction timing
- • Potential inheritance tax planning benefits
Disadvantages
- • Higher mortgage rates and arrangement fees
- • Annual accounting and filing costs
- • Capital gains tax if transferring existing properties in
- • Additional stamp duty implications