Property Investment

[MarillionFan]

Erm... They did ask specifics. They asked about investing in property through their limited companies. I believe the fact they asked this means they are already bought in to the idea of investing in property so didn't need to be told the benefits again

[mossman]

Property

Pension schemes are an obvious rip-off. The carrot is that the money you put in is tax deductible, but if you're running your Ltd Co sensibly you only pay 20% corporation tax on your profit anyway. Companies that provide pension schemes don't do it free of charge, and they invest in things which don't always perform well, so you might start to feel that you'd have been better off paying the 20% tax when you see how your pension plan is performing.

Property was an obviously better alternative (whether it still is depends on what kind of crystal ball you use). You saved for a 15% deposit, borrowed 85%, and the rent from your tenants just about covered the mortgage payments. Say you bought a flat for £100K with a £15K deposit, ten years later (or less) it was worth £200K, so your £15K investment had grown to £200K minus the £85K mortgage = £115 in ten years. I think this probably outperforms the stock market. If you put money into a pension scheme, it's your own money, whereas if you go down the property route, in effect your tenants are paying your pension for you. Buy a few flats over several years and you've got a portfolio that's worth a lot more than any pension scheme that you are likely to accumulate.

The downside is that not everyone wants the hassle of managing rental properties, and the present time might not be the best time to buy property (I don't claim to know whether it is or not).

Back to your main issue, should you do it through your Ltd Co? The only advantage that can see is if you have a lot of money in your Ltd Co that you need to store somewhere, and you're using property as a place to store it.

Buying properties personally can be more tax advantageous e.g. if you are married and you buy properties jointly with your spouse, whenever you sell a property you've got two lots of capital gains tax allowance to use.

I am not an accountant, so best to discuss it with your accountant.

[Olly]

but if you're running your Ltd Co sensibly you only pay 20% corporation tax on your profit

Erm..thought it was 21%

[mossman]

Erm..thought it was 21%

Yes OK I forgot it went up a couple of years ago.

[Fred Bloggs]

22% soon.