Ascendis call on landlords to look at the benefits of incorporation

Property tax specialists at accountancy firm, Ascendis, believe that thousands of landlords could benefit from the tax advantage that comes from incorporating their existing property portfolio into a limited company.

The firm is explaining to landlords across the North West how incorporating a property portfolio into a limited business carried with it several advantages, not least being able to benefit from mortgage interest tax relief on buy-to-let properties.

This relief was once enjoyed by all landlords, including those that were unincorporated and taxed by their personal income through their tax returns.

However, for many years now this hasn’t been possible, resulting in personal tax liabilities remaining high despite the profits of many investors and landlords falling – especially as mortgage rates continue to rise.

This issue is going to affect more and more landlords as fixed-rate mortgages on mortgage properties come to an end and new, higher interest rates start to bite.

Andy Wilson, Tax Director at Ascendis, said: “Inflation continues to remain exceptionally high, and every indication is that buy-to-let mortgage rates will also remain high as lenders protect themselves.

“That is why the value of incorporation has never been greater, as limited companies continue to be able to reclaim some of the mortgage interest costs back as tax reliefs.”

He explained that whilst transferring properties into a limited company can result in Stamp Duty Land Tax costs, over the term of a mortgage the tax savings could still be considerable.

“Incorporating your existing property businesses into a limited company is quite a straightforward process and comes with other benefits beyond mortgage interest relief,” added Andy.