Property businesses come in many different shapes and sizes, from a simple rental business to longer term building and development projects. Whatever your venture, there are a range of taxation issues which will need to be addressed from the outset, as well as a number of specific tax planning aspects and opportunities to be considered.
In recent years the Government has sought to clampdown on tax reliefs available to landlords, which has resulted in significantly higher bills. Despite these changes landlords and property investors can still make strong returns and saving with careful planning.
One of the first questions many landlords ask is who should be involved and should you be a sole trader, partnership or limited company? However, other questions are just as important such as:
- Which taxes will apply? Depending on your business, this could include income tax, corporation tax, capital gains tax, VAT, inheritance tax and stamp duty.
- Capital allowances– will you be able to claim this tax relief on your expenditures and will all expenditure be tax deductible?
- Construction Industry Tax Scheme– do you need to register?
- Exit strategy– whether you are retiring or simply moving on to another venture, how can you do so in the most tax effective way?
- Profits– how can these be extracted from the business?