Accountants for Property Investors
Property investment has many complexities associated with it and having specialised accountants for property investors by your side offers several benefits. We’ll explore some of them here and delve into the details…
Income from investment property is taxed differently depending on why it is owned, whether owned as a development project or for long term rental returns and also how the property is owned, namely whether held personally or via a company.
Tax is charged when a property is bought. Tax is charged on income the property generates while owned, and tax may again be charged when the property is sold. The tax rates and treatment all vary depending what the purpose of the investment is and the ownership structure.
So with buying property being a large investment with potential for substantial returns, it’s essential to plan ahead to minimise taxes due. Property tax advice before making an investment could save significant amounts of tax, or even reviewing existing portfolios of property may lead to invaluable tax-saving measures.
Other taxes
Income tax/ Corporation Tax is not the only tax you need to be thinking about in connection with property investment. You also need to take Stamp Duty (SDLT), VAT, and Capital Gains Tax into account if you decide to sell part or all of your portfolio.
The decision of whether to own the property under sole name vs owned by a limited company will be taken before the property purchase to simplify the land registry process, although it can be changed at a later date if necessary. However please note there may be potential tax implications if the ownership of the property is changed from sole name to LTD company name at a later date.
There is an added complication if some or all of the property you own is in another country. While dealing with UK property is reasonably straightforward, income earned from the foreign property may be subject to taxation in both the country where it is located and in the UK if you are resident in the UK. There are many factors at play, including whether there is a tax treaty in place which could mean there is double tax relief available in the UK for the tax paid in the country where the property is located.
It’s complexities such as these that makes having specialised accountants for property investors there to advise you so beneficial.
Investment strategy
The correct type of vehicle for property investment will depend on the intention for the property investment. Whatever strategy you decide on, you need to understand which types of tax might be payable at which points in the property investment life-cycle.
What do accountants for property investors property do?
A specialised property accountant can deal with all the financial aspects of investing in property, whether that is private, commercial or industrial. They can carry out property-related accounting, asset management, and bookkeeping duties for an investor, and manage the company and client accounts and portfolios for most property investment ventures.
They are in an ideal position to provide, not just the accountancy service, but also advice and information on all matters relating to buying, selling and managing your property portfolio—whether that’s a single buy-to-let property or a large portfolio with a mix of different types of buildings and land. A well-informed property tax advisor can help you to mitigate the tax liability over the life of your property investment.
Passman Leonard offers great value, fast, accurate accounting support to individuals and small-medium-sized businesses from all industries in and around London. Our qualified, diverse team is here to take the strain. You can find out more about click here or email us at info@passmanleonard.co.uk
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