Blog Post No.96
Taxation for buy-to-let with Alan Kennedy
As April is tax month, we are joined this week by Alan Kennedy, an expert in taxation with many years of experience assisting high net worth clients.
Alan talks us through the difference between Buy to Let for individuals and for companies and what to consider when planning for this. He discusses the balancing act between personal tax rates and interest element tax rates and what to think about when deciding if you are going to invest as an individual or a company.
We also discuss what are the potential Capital Gains Tax implications of an individual investment versus a company portfolio. And what actually constitutes a valid company portfolio from a tax perspective and the challenges around incorporation as a process.
Even if you already own a property at an individual level, this interview will give you some guidance on how to maximise your tax deductions and set up your tax process as efficiently and effectively as possible. .
“ The main issue with a property and what’s deductible usually revolves around whether it’s a capital expense or just a revenue expense.
And the simplest way to think about it, because people do get confused about it, is this: For capital gains tax purposes, you can deduct anything that is an alteration and extension or an improvement to the property and all the professional costs associated with that. Architects, planners fees, legal fees, etc., all form part of the base cost for capital gains tax purposes.”