George Osborne's concerted attack on residential landlords has left many property investors wondering whether they should use a company to make their investments.
Why Should I Use a Company?
From a tax perspective, a company has two main advantages: lower rates of tax and better relief for interest and finance costs.
Companies currently pay Corporation Tax at 20% on all of their profits, income and gains, and this will reduce to 18% by 2020. There are no restrictions on interest relief for companies investing in residential property - they can even roll up excess interest costs and set them against future capital gains - something that individual landlords cannot do.
Companies have other advantages too. Limited liability status may provide protection against unforeseen losses or liabilities - something which is especially useful for property developers.
Are There Any Disadvantages to Using a Company?