Using a property investment LLP for school fees planning purposes
Another great article from Property 118 Tax experts…
Our client was a higher rate tax-payer and also owned four properties in his own name with the benefit of mortgages. Accordingly, he was affected by the restrictions on finance cost relief.
His wife is also a higher rate tax-payer, so there was no scope to save tax by forming a partnership and allocating profits to her either.
Incorporation also wasn’t viable, because ‘incorporation relief’ would not have been available to roll over capital gains into company shares.
They were using their rental profits to pay for the school fees for their young children.
In this instance, our clients parents also owned one rental property and their incomes were well below the higher rate tax threshold. This presented an opportunity too good to miss.