Buying commercial property, tax implications?
Discussion
Yes, you will be exposed to additional tax liabilities and yes, if you are a higher rate tax payer (40%), any additional income will be taxed at the higher rate.
You need to be aware of a number of things -
people are taxed on the PROFITS from their rental income - not the actual rent amounts received. Therefore, the amount of tax you pay will depend on by how much the rental income exceeds the cost of running the rented properties. If the properties make a loss (not that unusual), no tax is payable and the losses can be utilised to reduce future tax liabilities arising from those properties.
Capital Gains Tax - at some future date it is pretty propable that the properties will eventually be sold or disposed of in some way. At that point, the gain (hopefully) achieved on the sale will be subject to Capital Gains Tax - although that can be mitigated by making maximum useage of available allowances and reliefs.
Once you have acquired the properties and start receiving rent, you need to contact the Revenue to let them know this and eventually you will need to complete a Self Assesment tax return. In particular, you will need to complete the "Land and Property" supplementary pages.
And yes, get an accountant.
You need to be aware of a number of things -
people are taxed on the PROFITS from their rental income - not the actual rent amounts received. Therefore, the amount of tax you pay will depend on by how much the rental income exceeds the cost of running the rented properties. If the properties make a loss (not that unusual), no tax is payable and the losses can be utilised to reduce future tax liabilities arising from those properties.
Capital Gains Tax - at some future date it is pretty propable that the properties will eventually be sold or disposed of in some way. At that point, the gain (hopefully) achieved on the sale will be subject to Capital Gains Tax - although that can be mitigated by making maximum useage of available allowances and reliefs.
Once you have acquired the properties and start receiving rent, you need to contact the Revenue to let them know this and eventually you will need to complete a Self Assesment tax return. In particular, you will need to complete the "Land and Property" supplementary pages.
And yes, get an accountant.
Gassing Station | Business | Top of Page | What's New | My Stuff