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fru-gal

New Buy-To-Let Deal Escapes George Osborne's Landlord Tax

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Surprisingly good for a Dyson article - are the editors back from their holidays? I didn't spot any typos and and it actually showed how gearing works on the way down.

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Should this shareholding arrangement be subject to some kind of regulation?

Looks fine to me, corporate landlords replacing private ones. There'll be additional taxes levied within this new structure, surely? For example relating to paying ni, income tax etc for the employees of the trust involved in managing the properties?

Edited by Si1

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Should this shareholding arrangement be subject to some kind of regulation?

Looks fine to me, corporate landlords replacing private ones. There'll be additional taxes levied within this new structure, surely? For example relating to paying ni, income tax etc for the employees of the trust involved in managing the properties?

Corporate landlords can offset their income against borrowing costs in full, and only pay tax on the actual profits. But the corporation tax that avoids is only 20%, which is also what individual landlords can still offset.

The owners of the corporate landlord then pay tax at the going rate on money they take out of the company. If those owners pay higher rate tax then they also pay it on their income from the company (dividends in the torygraph's story). If there's a loophole to be had, it's a way to harness the £5k tax-free dividend allowance, but that's all. So it's just like buying shares in any (other) company. A landlord with more than £5k total dividend income will (other things being equal) be worse off in this scheme than holding property directly.

[edit to add] It's the same deal as investing in a FTSE-listed landlord, only with the added risk of having more eggs in fewer baskets, and less regulatory protection for investors against the risk of questionable management.

Edited by porca misèria

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Its of no use to anyone already owning a BTL since you cannot transfer private property into a corporate entity without the individual paying CGT and the corporation paying stamp duty.

Then theres the issue of needing a loan at commercial rates. Its just a Ltd co setup with multiple share holders instead of one, a total non story and blatant infomercial for the company TBH. Still it probably got a few BTLers all hopeful and then pissed in their face so I guess its not all bad.

Edited by goldbug9999

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very misleading title for that article

the investment is nothing at all like BTL in any interpretation

I wouldn't touch it personally - it is too open to 'management charges' as well as being wholly reliant on letting income and capital value of the type of properties that I have no interest in owning

As well as being at the wrong point on the house price graph

no thanks

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