Kent Reliance has commissioned a new report to educate landlords on the tax implications of incorporating.
Analysis of Kent Reliance’s data shows that the value of mortgage applications made for limited companies had almost doubled in the second half of 2015, rising from 18% in July to 32% in December 2015.
With demand for incorporation rising following the tax changes, the lender warns that landlords may find themselves considering to enter a limited company holding without clear knowledge on the implications of doing so.
Kent Reliance has commissioned EY to produce a report which fully details the recent changes that affect landlords, and provides guidance and examples for property investors thinking of making the switch.
The report shows how profits could differ when the changes take effect (2020/21), and the need to get advice before undertaking these changes. To read the full report, and full range of case studies, click here: Changes to UK Tax relief on Finance Cost.
John Eastgate, sales and marketing director for OneSavings Bank, said: “The rush to incorporate doesn’t yet show signs of abating, but it’s vital that landlords looking to take this option fully understand the implications of doing so. For many, incorporation will bring down tax bills, but it is not a one size fits all approach. For instance, landlords will need to factor in additional transactional and administrative costs if they do make the move.
“We’d urge any property investor to seek professional advice from a suitably qualified professional before any decision. This is why we have partnered with EY to help educate those wanting to convert into limited company ownership. By offering this aid to brokers, we are enabling them to add value to their client relationships and help willing landlords see if it is the correct approach for them.”
