Property has traditionally been a great and reliable investment over the years, however it requires careful accounting to ensure that taxes are calculated correctly and any allowances claimed. Chamberlains are well versed in this area of accountancy and can advise.
Company or personal investment?
Some people invest personally whilst others prefer to invest through a company. The best route depends on your attitude to risk, tax considerations and whether you want to pool your resources with other people.
Accounts and tax
The personal approach may seem simplest until things get complicated. The company route provides a more formal framework that allows you to (a) keep it apart from your personal life and (b) makes it easier to bring in other people by different shareholdings. This way you may need an audit, which Chamberlains are qualified to provide.
Whichever way you go, you’ll need to keep accounts and taxes will need addressing including tax on profits from rent or sale and VAT on sale, purchase and expenses. None of this is straightforward, and we advise that you seek proper advice beforehand, rather than afterwards.
Things have been becoming more complicated in the buy-to-let market, with an extra 3% stamp duty on second, (and subsequent), properties and reduced allowance for mortgage interest. The latter can be quite punitive – it’s not just that interest will be only tax-allowable at basic rates of tax. People with larger property portfolios and little other income will be particularly hard hit.
When you’re talking about large amounts of money, as is normally the case with property, tax savings can be very worthwhile – but losses can be disastrous. There are various tax allowances available, but these need to be claimed; they’re not automatic. For example, commercial properties may be eligible for capital allowances – which we can help with.
To discuss your property accountancy needs, please call +44 (0)1252 702600
or email firstname.lastname@example.org
Chamberlains …professional, friendly, accountancy & auditing services in Greater London, Surrey & Hampshire