It is indeed. Have you found a single case where it made sense?Think this is well covered in other posts
Hi Brendan notOK
If you are concerned about the risk of being unable to meet the repayments, then you probably should be avoiding the investment.
There is a cash-flow advantage, but the tax cost is horrific and not really worth it.
I am all for reducing risk, but the best way to do that is not to borrow to invest. Making a terribly inefficient investment is not the way to go.
If you are borrowing to invest in property, you should have sufficient income outside the rent to allow you to meet the repayments. If you don't have the additional income, then you should not be making the investment.
Brendan
Hi Breadan thanks for the infoOK
If you are concerned about the risk of being unable to meet the repayments, then you probably should be avoiding the investment.
There is a cash-flow advantage, but the tax cost is horrific and not really worth it.
I am all for reducing risk, but the best way to do that is not to borrow to invest. Making a terribly inefficient investment is not the way to go.
If you are borrowing to invest in property, you should have sufficient income outside the rent to allow you to meet the repayments. If you don't have the additional income, then you should not be making the investment.
Brendan
Obviously I’ll be speaking to my accountant
Hi red onion thanks for the reply from what I see is the overriding advice is buy personally from what I make out that limited company pays taxes at 20% surcharge +12.5% = 32.5%It is indeed. Have you found a single case where it made sense?
Have you factored the Close Company Surcharge into your after tax and cashflow analysis?
Corporation tax rate for non trading income (e.g. rent) is 25%, not 12.5%.from what I make out that limited company pays taxes at 20% surcharge +12.5% = 32.5%
My point is I’m never going to sell the property
Well then that that put bed not much point then soCorporation tax rate for non trading income (e.g. rent) is 25%, not 12.5%.
Plus surcharge.
Well then that that put bed not much point then so
It's an investment property. Not a property used by the company.Where does rent come into this - the asset is owned by the company - no rent is payable?
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