Landlord ltd vs private landlord. Tax?

James Bond Junior

I'm just wondering here after something I saw in another thread about institutional landlords paying 12.5% tax vs the ordinary landlord paying 52%. If one had a mortgaged rental property could they set up a limited company in order to rent the house and therefore pay a 12.5% rate of tax on rental income? As in the landlord owns the company and is paid a "wage" by their company thus only paying income tax.

Harvey Normal

As I said in the other thread the 12.5% is corporate tax on profits after expenses. That's earned by the company not you.

If you transfer the money to yourself as a dividend then you will be taxed on that income as normal income tax levels which will be 52% if you are already earning at the higher rate. Your company still owes 12.5% on top.

If you transfer to yourself as a wage you can expense it. The first option is more tax, the second is the same amount of tax.

Also you'd probably be taxed when you sell the house and transfer the money to yourself. And when you sell to the company in the first place if you already own the house.

James Bond Junior

In other words unless you had a rake of places it's pointless!

Frynge

Is corporation tax on business involving property rental not 25%.