Hi
Im wondering if this is wise- I've seen entries here previously where Brendan Burgess advised never to buy property through an Irish limited company.
So- I'm a Uk resident currently- Im considering a 300K purchase in Ireland - deposit of 75k borrowing 75% interest at 4%
Rental income E24000
Mortgage interest E 9000 ( in UK mortgage interest is no longer tax deductable when you buy in your own name- 20% of interest paid is allowed as a tax credit)
Tax ( assuming 0 expenses for illustrative purposes) E24k -9K = 15K x19% = almost 3K
E12000 profit a year- after 10 years E120000- withdraw for personal use as dividends- tax rate 39% so net profit = E73 k approx
If I buy in my name
Rental income E24000
Tax 45% of E24000= almost E11k ( 20% credit on interest = 2k approx) Net tax 9k
Interest E9000
E6000 profit a year- after 10 years E60000
Net difference E13k
Limited company seems better but not by a whole pile?- am I missing anything obvious?
Im sure buying through limited company's other advantages not listed here- for example using the build up in funds to purchase another property- I will seek professional advice. But thought I'd ask here first!
Regards
nbc
Im wondering if this is wise- I've seen entries here previously where Brendan Burgess advised never to buy property through an Irish limited company.
So- I'm a Uk resident currently- Im considering a 300K purchase in Ireland - deposit of 75k borrowing 75% interest at 4%
Rental income E24000
Mortgage interest E 9000 ( in UK mortgage interest is no longer tax deductable when you buy in your own name- 20% of interest paid is allowed as a tax credit)
Tax ( assuming 0 expenses for illustrative purposes) E24k -9K = 15K x19% = almost 3K
E12000 profit a year- after 10 years E120000- withdraw for personal use as dividends- tax rate 39% so net profit = E73 k approx
If I buy in my name
Rental income E24000
Tax 45% of E24000= almost E11k ( 20% credit on interest = 2k approx) Net tax 9k
Interest E9000
E6000 profit a year- after 10 years E60000
Net difference E13k
Limited company seems better but not by a whole pile?- am I missing anything obvious?
Im sure buying through limited company's other advantages not listed here- for example using the build up in funds to purchase another property- I will seek professional advice. But thought I'd ask here first!
Regards
nbc