Landlords should take advantage of the stamp duty holiday by incorporating their existing portfolio into a limited company, property tax specialists at accountancy firm MJ Bushell have urged.
The temporary increase to the stamp duty threshold from £125,000 to £500,000 means landlords can make a significant saving when incorporating, when they’d typically need to stump up a hefty sum of money.
Matt Warwick, tax senior at MJ Bushell, said: Although landlords buying additional properties still face a 3% SDLT surcharge on their property purchases, they are not required to pay the standard rate of SDLT on top for homes valued £500,000 or less.
“This also applies to the transfer of properties into a business, which would normally attract a substantial SDLT bill. In fact, the savings could mean they pay up to half as much.”
Being in a limited company structure means landlords can benefit from mortgage interest tax relief on buy-to-let properties, which isn’t the case for landlords classed as individuals.
Warwick added: “Before the SDLT holiday there had been a lot of debate about whether incorporation is the right approach to take and whether it saves sufficient money to merit the switch,” he added.