Bedrock’s Property business incorporation solution is for individuals and partnerships who run their property portfolios as a business and wish to save income tax on their rental profits.

Client Challenge

Our client was concerned about how much income tax he was paying on his property portfolio profits. His situation was going to get worse over the next few years with the changes announced in the 2015 Summer Budget. He realised that he had to do something quickly.

How did Bedrock help?

Bedrock reviewed and discussed the client’s situation, and together decided to use Bedrock’s Property Business incorporation solution to meet their needs.

Business Impact and Benefits

Our client’s rental profits are now subject to corporation tax at 20% rather than income tax at 40% and 45%. This has freed up extra cash to help him grow and refurbish his property portfolio. He was able to rollover the capital gains arising on the transfer of his properties into the shares issued by the new company. The company achieved an uplift from his capital gains tax base cost to current market values thereby saving tax should there be a disposal of properties in the future. Although our client had a stamp duty land tax (SDLT) liability both this and the fees for the solution were significantly outweighed by the tax savings. The benefits were enhanced further by our client increasing borrowings to fund the SDLT and fees. 

Financial benefits

Over the next 10 years we estimate that our client will save approximately £260,000 of tax on rental profits and potentially £374,000 of capital gains tax. Working with Bedrock has meant that these savings can be realised and our client can benefit in the long term.

Contact our team today for advice on managing tax for property owners and developers.

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Call us on 0115 778 8533 for a free consultation.

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