Rental properties into a LTD company ?

WildWood80

Hi folks

I have a few rental properties and am looking at the tax liabilities. Currently paying mortgages and 40% tax on them.

Not complaining about the system but wondering if I put them into a LTD company could I decrease the tax due. I’d love to increase the mortgage payments instead of paying tax and was wondering in a LTD company would the mortgage payments be seen as standard costs ?

You do know that when you pay yourself from the Ltd Co you will be paying the exact same rate of tax as you are now?

Allinall

Mortgage payments are not a cost for tax purposes.

If it’s a genuine enquiry (which I very much doubt) , seek professional advice, rather than relying on anonymous posters on boards.

nompere

https://www.boards.ie/discussion/2058337396/rental-properties-into-a-ltd-company

Can you afford the CGT liabilities you will incur on putting the properties into the company?

Only the interest on the mortgage is allowable in calculating the company's tax liabilities, not the capital repayments.

Then work out the cost of the double CGT charge on ending the arrangement.

Using a company to own investments is generally an exercise in creating tax liabilities where otherwise they would not exist.

WildWood80

Thanks folks. I will seek professional advice.

If the mortgage payment itself can’t go against costs then it would prob make it a pointless exercise. I’m not actually looking to pay myself from the company but really just decrease the tax due.

Marcusm

https://www.boards.ie/discussion/comment/121812597#Comment_121812597

The mortgage interest deduction would be the same for the company as for you personally. The net rental profit (computed the same whether in company or held personally) would be taxed at 25% in the company plus, unless you dividend it out, it would be subject to a surcharge which will be 15% or 20%, ie no real benefit to you. If it’s dividended out to you, you will be taxed on it. A company to envelope a rental portfolio in Ireland is rarely tax efficient.

WildWood80

Thanks Marcusm , much appreciated.

I have a sync with a financial advisor later in the week. I prob need to put all the cards on the table and see what way works out more tax efficient. Even if I could offset the car costs, and some house costs might make sway the decision.

Marcusm

What car costs and house costs do you think you can legitimately offset through a limited company which cannot be offset anyway? The answer should be none. Anything else is a falsehood and certainly anyone who advises that you can is either a shyster or ill-informed.

Kaisr Sose

Agreed. Car costs would not be/are not a deductible rental expense.