Company Landlords
Notes on some of the taxes applying to companies.
Accounts compliance
All UK companies and Limited Liability partnerships must comply with UK Company Law. This includes the maintenance of appropriate records, and annual preparation of accounts. These accounts must be prepared according to the relevant accounting standards and filed at Companies House. After the first year, the accounts must be filed with Companies House within 9 months of the accounting reference date (year end). The deadline for filing the first accounts is 21 months after incorporation.
In addition, the Company must file a Confirmation Statement every year. This deals with ownership and day-to-day control of the Company.
Corporation Tax
UK Company Landlords pay Corporation Tax on the profit made from letting property. Generally the rules for calculating the profit are the same as for individual landlords. The principal differences between the taxation of the income of company landlords and individual landlords is that company landlords are taxed at Corporation Tax rates, there is no restriction on tax relief for interest, and gains are taxed at Corporation Tax rates.
Annual Tax on Enveloped Dwellings (ATED)
This is a tax or charge levied on residential property held by “non-natural persons” (including companies). It levied an annual charge at increasing rates on property worth more than £500,000 as at 5th April 2022. See tax rates.
If your Company lets the property it may claim relief from the charge. (There are a few other reliefs too.) But you have to claim the relief, it is not given automatically. This means completing an additional Return each year, and having the property valued every fifth year.
See also Annual Tax on Enveloped Dwellings.
Stamp Duty Land Tax (SDLT)
The 15% rate of Stamp Duty Land Tax was introduced at the same time as the Annual Tax on Enveloped Dwellings. The 15% rate also applies to Company (and other non-natural person) purchases in excess of £500,000. But it does NOT apply to purchases to be used for a property rental business. There are some other exceptions.
Capital Gains
Companies pay Corporation Tax on any gains made on the disposal of an asset.
Taking your profit from the Company
When you extract the profit for personal use you must remember that only the repayment of the loan made by you to the Company is tax free. Dividends, salary, etc. all attract further taxation.
