Hiya mate, Been a subscriber on this channel for the last six months, love your content keep it up. My favorite video is the one where you shared how you much income you make and your expenses for the property in Hull - thank you for the transparency. My question is regarding ROI, lets take your property in Hull it makes around 3% Net Yield on Rent and lets say the property appreciate in value by around 6% (per annum) that gives you an annual return on 9% which is great. I am assuming your property is in a limited company company so you would need to pay corporation tax at 19% which reduces the return to 7.29% and then if you want to take money out from your company as a dividend (most tax efficient way) you need to pay tax of 8.75% on top assuming you are a basic tax payer so this further reduces your return to 6.65% (7.29 x 0.9125). So my question is 6.65% is really good return when comparing with other investments out there like stocks (S&P 500 which returns around 8% a year and if you invest through ISA you do not need pay tax) and I am sure you would agree stocks are more passive than properties but less volatile. I currently do not own any investment properties but looking to buy one through ltd so that I can diversify my income. Thank you and thanks for taking the time to read this.
Hi mate thanks for subscribing and thanks for this excellent question. So there's a few things consider: 1. The tax you pay depends on how you spend your income from property. For example if you used all your profits for the year to buy an additional property- that would count as capital expenditure and you wouldn't pay any tax for the year. Versus if you took out those profits as dividends you would then pay corporation and dividend taxes. Versus if your spending is classified as operating expenses (e.g. food, travel, business mobile, business car, etc) this all reduces the tax you pay. 2. Capital allowances (depending on whether you've improved a property) could entitle you to a tax free level of profit each year. 3. Yes stocks & shares definitely more passive and ISA provides tax free gains up to a limit per year. But you still pay platform fees, fund manager fees, trading fees, etc which reduce return also. Great question!
@@thewealthwarren6940 Thanks Warren for this useful information. When you get a chance it would be great if you can create a content on the first two points (I was not aware of point 2). More and more people are buying properties through LTD but they are not educated on how best to manage tax and maximise returns. Thank you as always.
Hello, I've been watching some of your videos which are great by the way. I'm interested to invest up north (for the first time) and was wondering with your experience, do you think Hull is still a good place to consider for decent rental prices? Or would you now suggest elsewhere? Thank you, Stephanie PS. The plan is to buy a few properties to gain a decent passive income.
Hiya mate, Been a subscriber on this channel for the last six months, love your content keep it up. My favorite video is the one where you shared how you much income you make and your expenses for the property in Hull - thank you for the transparency.
My question is regarding ROI, lets take your property in Hull it makes around 3% Net Yield on Rent and lets say the property appreciate in value by around 6% (per annum) that gives you an annual return on 9% which is great.
I am assuming your property is in a limited company company so you would need to pay corporation tax at 19% which reduces the return to 7.29% and then if you want to take money out from your company as a dividend (most tax efficient way) you need to pay tax of 8.75% on top assuming you are a basic tax payer so this further reduces your return to 6.65% (7.29 x 0.9125).
So my question is 6.65% is really good return when comparing with other investments out there like stocks (S&P 500 which returns around 8% a year and if you invest through ISA you do not need pay tax) and I am sure you would agree stocks are more passive than properties but less volatile.
I currently do not own any investment properties but looking to buy one through ltd so that I can diversify my income.
Thank you and thanks for taking the time to read this.
Typo error I meant to say stocks are more volatile than housing
Hi mate thanks for subscribing and thanks for this excellent question. So there's a few things consider:
1. The tax you pay depends on how you spend your income from property. For example if you used all your profits for the year to buy an additional property- that would count as capital expenditure and you wouldn't pay any tax for the year. Versus if you took out those profits as dividends you would then pay corporation and dividend taxes. Versus if your spending is classified as operating expenses (e.g. food, travel, business mobile, business car, etc) this all reduces the tax you pay.
2. Capital allowances (depending on whether you've improved a property) could entitle you to a tax free level of profit each year.
3. Yes stocks & shares definitely more passive and ISA provides tax free gains up to a limit per year. But you still pay platform fees, fund manager fees, trading fees, etc which reduce return also.
Great question!
@@thewealthwarren6940 Thanks Warren for this useful information. When you get a chance it would be great if you can create a content on the first two points (I was not aware of point 2). More and more people are buying properties through LTD but they are not educated on how best to manage tax and maximise returns. Thank you as always.
@@justinjoseph1467 yea will make a video on this soon. Cheers!
Hello, I've been watching some of your videos which are great by the way. I'm interested to invest up north (for the first time) and was wondering with your experience, do you think Hull is still a good place to consider for decent rental prices? Or would you now suggest elsewhere? Thank you, Stephanie PS. The plan is to buy a few properties to gain a decent passive income.