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The Seven Deadly Tax Saving Strategies - Five of Seven
Welcome to the Fifth of Seven Property Tax Saving Strategies brought to you by Homes Seekers on behalf of Amer Siddiq.
Strategy 5 - Will a Ltd. Company Improve YOUR
Some of the most burning tax questions property investors have are
- 'Should I buy my property through a Ltd. company?'
- 'Should I move my properties into a Ltd. company?'
- 'If I own my properties in a Ltd. company, will I avoid paying property tax?'
If you have not already asked these questions, then I am certain you will be doing so in the near future, especially if you intend to continue investing in property and growing your portfolio.
To be honest, answering these questions is not straightforward (tax never is!), and the answers depend on your
a) chosen investment strategy;
b) personal and financial circumstances/ambitions;
c) for how long you intend to hold the properties.
However, before you even decide whether a Ltd. Company will improve your tax position, there are some very basic rules/guidelines that must be understood.
In this strategy, Ian McTernan, one of my property tax gurus and author of our best-selling guide 'How to Use Companies to Cut Your Property Tax Bills,' will tell you what you must consider before you can decide if holding your properties through a Ltd. company will benefit YOU!
So, let's get cracking with this strategy and learn from Ian's words of wisdom!
Just like the previous Property Tax Strategy, I recommend that you print off and file this strategy away so that you have easy access to it whenever you are off-line!
Take it away, Ian...
Already a property investor?
Do YOU already own investment properties?
Are you already on the buy-to-let investment ladder?
If the answer is YES and you are now wondering whether moving your properties into a Ltd. Company is a good idea, then consider the following FACT:
*** Properties must be transferred into a Ltd. company at market value! ***
Yes, that's RIGHT!
Moving properties into a company is treated in the same way as if you were selling the properties!
What this means is that if you bought your investment property five years ago and you would now like to move it into a Ltd. company, then you are likely to have to
pay an IMMEDIATE capital gains tax liability.
This is purely due to the fact that property prices have significantly increased over the past few years!
The exception to this rule is if the property is your principle private residence.
About the Author: www.propertyconceptonline.com provides readers with the latest reviews, articles, commentaries and write-ups on Tax Saving Strategies, property-tax-portal, annual income tax bill related subjects.