Here's 4 free property courses I've made totalling over 32-hours of property knowledge: www.ahmed-khan.com/free-courses

I am so happy that I made productive decisions about my finances that changed my life forever. I am a single father and I live in Spain, I bought my second house in September and I hope to retire next year at 40 if all goes well. thanks to Natalie Strayer for helping me achieve this.

Helpful video. Point of note that any income over £100k the government deduct £1 off your personal allowance for every £2 you earn (until it runs out at £125k). Which equates to 60% tax from earnings between £100k to £125k! So if you earn the £125k you effectively have zero personal allowance. Hideous rule!!

My understanding is the video is incorrect. The changes to tax meant the income was taxed at the marginal rate but the interest cost was restricted to basic rate. This makes no difference to basic rate tax payers. you still pay tax of £450* 20% = £90 It is higher tax payer who pay more by 20% of the interest costs or an extra £70 / month ((40%-20%) * £350

great video, v useful - your video production has gotten really good too. keep it up and i would bet money this channel will blow up

Interest rates are 1% higher if you buy in LTD company as compared to personal name. Can you please Include in your calculations to understand how much you will actually save in LTD company

Great video, just going through this at the moment and looking into Incorporation relief and tax efficient strategies. Appreciate your analysis.

I’m on £50k, I have one house which rental income is £1300 a month with a mortgage of £790 on that property. So it only generates £510 a month. If I add that onto my net salary of £3,293.45 it takes me into the 40% tax bracket. The UK is the biggest pain in the ass! Moving that one property into a LTD means less lenders, pretty sure higher interest rates. There must be another way around.

Thanks for video, this is anwer I was looking for, so I can plan my next purchase of btl right way!!! Thanks

Missing half the picture. The mortgage would be more in the ltd as rates are higher for ltd companies. The fees to take out the mortgage are higher in an ltd increasing the initial investment. The cost of running a ltd is huge especially if you only have 1 or 2 properties to split that cost between. I’m sure if you worked it out properly as it would be in the real world you’d need 6+ properties before ltd would work out better than personal name. If you then took into account the extra cost per property while you built up the portfolio say 3/4 years of extra cost getting to 6+ properties your looking at a 10-15 year time span before you get that lost money in the early years back. It’s never as black and white as all these videos make out.

Great video! Few notes: -I think that dividend allowance has dropped even more from 1k to £500 -once you paid yourself a dividend are you not supposed to pay Income tax as well (form the dividend income)? 😯

You can claim a 20% tax credit to offset against mortgage interest up to the lower tax band. Example Portfolio producing; £70,000 -20,000 Expenses £50,000 income including interest -30,000 Net of mortgage interest £20,000 mortgage interest Because the net income and mortgage Interest is still within the lower tax band, the tax credit offsets any applicable tax on the interest. You would only pay income tax on £17,430 Once it goes over £50,000 you are attracting tax. Example; £50,000 Salary from employment £12,000 Rental income from a property £12,000 - 2,000 Expenses £10,000 profit including mortgage. Tax would be £4,000 as you have no lower rate banding left to claim tax credit. In effect this means tax on turnover.

But is it worth it after you hit 50k as your being taxed 19% + 33.75% = 52.75% How is anyone making any money with taxes that high ?

Great video. Quick question. I'm still in the 20% tax bracket (around £40k PA) with 1 BTL property. When I buy my 2nd property, can I offset 50% of the income to my wife. She's well within the 20% bracket THANKS

Very good video Ahmed, It’s always best to have a limited company and I totally agree with you bro, but in the UK for PAYE/Businesses we have Progressive Taxation System which means if the profit/salary is above 50k, it doesn’t deduct full 40% but it deducts nearest threshold first. Like you’ve mentioned first 12,570 Threshold.

You never included the higher mortgage costs, at least 1%, also in a personal name you can claim back 20% or mortgage interest costs, plus all the extra legal fees and accountancy fees, it be good to see a video which incorporates those. Also it be good for it to compare someone that lives purely off property and someone who earns 50k from employment to see the true comparison. Like you presentation but lots of variables not included. Also is corporation tax not 25% when you earn over 50k?

Not related to this video, but as you mentioned recently that you sold your first deal as a Sourcer, will you be making a course about deal sourcing and would you consider partnership with other sourcers?

I love the way you explain things

Getting a mortgage on ltd is much more, managing company comes with costs and headache, (accounting fees) + all the property value increase is owned by the ltd, on sale of property u can't get the money out easy.

Hello ahmed thanks for the video, I've got a question for you. I bought a rental property in my own personal name a few years back when my salary was lower which meant combined with my rental income my overall income was still below the 40% bracket. Now my income has gone up substantially and im entering into the 40% tax bracket because of my rental, my question being can you somehow convert/swap my rental in my personal name over to a limited company ? I have a mortgage outstanding on the property if that makes any difference also. Cheers

Very good video Ahmed and much appreciated as a lot of other property videos on this subject are vague with far less explanation. 2 years ago I purchased 6 properties over 12 months which means I now have 8 in total in my personal name. This meant that I finished my Job to do property full time and I am able to use the tax free allowance to it’s maximum and manage to just stay within the 20% bracket by being strategic new year tax year end, yet I’m still being told that I would have been wiser to put in in LTD company structure. I have no plans to add anymore properties to my portfolio and pay myself £2000 pm to live on while hopefully over time capital growth will add to my pension (I’m 49 years old) was I wrong to think personal name was a better way for myself?

It switches when you move higher, better to do it personally or keep the money in a company and never take it out

Would be practical to include accountants annual fees for your LTD company holding all your investment properties to get a clear picture of your total expenditure.

Have i misunderstood but if you're in higher rate bracket youll pay corp tax, min 19% and 33.75% on dividends?

I do wonder what’s the longevity of LTD? Whilst it sounds good now, what about the next 5-10 years when government changes continue to happen. I know we can’t foresee this but I just hope it’s not a temporary opportunity

Thx

I really don't who in his right mind will want to still invest in UK property after 4th of July...Labour already indicated that they'll double the CGT tax, there could be rent controls across the UK and progressive tax on each additional property. Plus they will make even stronger pro-tenant laws...

Thank you for your video, just wanted to check if dividends allowance reduced to 500£ a year now .

thanks for your video, but i work out diff figure. before s24, u pay inc tax 20% on £450=90. now for low tax rate payer, you pay inc tax on £(1000-200) x 20%=160, but also get 20% tax credit on £350 interest = 70, so the total tax still £90pm. ie profit aft tax is same. am i miss something?

Spot on. What if after paying dividends & claiming back owner's lending money, my expenses are higher than the profit ? Would I still need to pay corporation tax ?

On point

Surely you could not claim for a car lease if your properties are in the same town as you ? Or could you ?

Amazing

Can't you deduct the expenses even if it's in your personal name?

easy just cash out the property

Interesting video, but I think your calculations are not right. When you rent a property through SPV company, only the interest is treated as expense not the entire repayment monthly amount. Can you explain why you said the entire repayment amount is deductible?

Time to leave the uk I think