Property Tax Planning Service
UK property tax has changed significantly in recent years, and many property businesses find themselves paying the price. Spotlight Accounting are property tax experts and provide valuable tax advice to help property investors and landlords to minimise their tax burden and maximise their income.
Welcome to Spotlight Accounting, property tax specialists in Shropshire
Tax is one of the biggest expenses in the property industry, and the UK has some of the highest property taxes in the world. So, unless you have a thorough understanding of your tax position, you may find it seriously eats into your profit.
Fortunately, at Spotlight Accounting, we have an experienced team of tax advisers to help you demystify property tax legislation, review your position and highlight ways in which to save. As your dedicated accountant, we can advise you on what tax relief is available to you and what business structure offers the most tax advantages.
What comes under “property tax”?
“Property tax” is an umbrella term for the collection of taxes associated with property transactions. As a landlord or property investor, you are subject to a variety of property taxes, including:
Income Tax – paid by private landlords and investors on rental income and profits from selling properties
Capital Gains Tax (CGT) – paid by private landlords and investors when the proceeds of the property transaction exceed the purchase cost
Stamp Duty Land Tax (SDLT) – payable on completion of property purchases in most cases
Corporation Tax – paid by property businesses registered as Limited Companies on their profits
Council Tax – payable annually to local authorities
VAT – applied on goods and services related to construction, renovation or repairs of a property
With so many property taxes to grapple with, it can be a hard subject to navigate. Spotlight Accounting are property accountants and tax advisers. We can help you navigate the property tax regime, understand your tax position and make valuable savings. To find out about this and our other accounting services, fill in our contact form.
Property tax advice
As a landlord or property investor, the way in which your properties are held can have a significant impact on your tax liability. Recent years have seen landlords and investors hit with bigger tax bills, and as a result, more property investors are choosing to hold their properties in a limited company structure.
There are pros and cons to both business structures, and which one is right for you depends on your business and personal goals, the size of your property portfolio and your financial situation. As your dedicated team of property accountants, Spotlight Accounting can advise you on the business structure that is right for you now, and in the future.
Tax benefits of holding property in a limited company
If you buy properties as an individual, you are liable for income tax on your profit. If you register your property business as a limited company, however, you are liable for Corporation Tax. Even with the increase in Corporation Tax to 25% in 2023, there are still significant savings to be made if you are in the higher or additional rate tax bands.
In addition, there are other tax efficiencies of holding property in a limited company:
Companies can treat mortgage interest as a business expense, whereas individuals can only claim a tax credit and may never recover the full amount.
Companies are not liable for Capital Gains Tax; instead, they must declare ‘chargeable gains’ on their company tax return, which can be offset by capital losses and are taxed at a lower rate.
Our property tax planning services in Shropshire
You can expect a comprehensive and well-informed service from Spotlight Accounting. While property tax is complex, our aim is simple: to help you manage your property businesses more tax efficiently and retain more profit.
Our property review process:
Review – we will start with a thorough analysis of your property portfolio.
Analysis – we will crunch the numbers and document our findings.
Report – you will receive a detailed report of our findings and recommendations, including:
Which business structure suits your individual circumstances and has the most tax advantages – now and in the future.
Advice on which properties should be disposed of to be more tax efficient.
Your personalised property tax planning action plan.
Action – depending on our findings and the route you choose to take, we can help you to take the next steps, such as registering as a Limited Company and all it entails.
Frequently Asked Property Tax Questions
What is a special purpose vehicle (SPV)?
A special purpose vehicle (SPV) is essentially the same as a Limited Company but set up with the purpose of property investment and rental.
Do I have to pay Capital Gains Tax immediately?
Yes, private property investors must declare CGT on residential property to HMRC within 60 days of the transaction. That includes anyone that sells a second property that is not their main residence.
When is Stamp Duty due?
Stamp Duty must be paid on completion of a property transaction.
Choose Spotlight Accounting to maximise your property investment
At Spotlight Accounting, we are not just experienced property accountants, we have direct experience as landlords. So when you work with us, you can benefit from our first-hand knowledge of holding property investments.
Based in the beautiful surroundings of the Shropshire countryside, we are here for all of your property accounting requirements. To request an accounting quote and for further advice on property tax planning, please get in touch.