You can contribute up to £60k per year from your company into a private pension. But if you have reserves available in the company, there is scope for using any unused allowances from the past three years too.

It should also be noted that if contributions exceed £60k in any one year, additional taxes may need to be paid on any excess payments made by either yourself or your limited company which is why we have partnered with Capstone Financial who can support you with investments.

Corporation Tax is usually higher than individual tax when other payroll deductions are considered (NICs, Student Loans, etc.), so although you may be paying more into the pension overall due to Corporation Tax, it could still be beneficial.

It’s important to remember that limited companies and individuals cannot contribute to pensions in a similar way – individual contributions will come from personal funds whereas company contributions are classed as business expenses, reducing their taxable profits.

Contributing to a pension through your UK limited company can be a great decision. If your pension contributions are paid from the company’s income, this reduces the company’s taxable profits which in turn reduces the corporate tax burden.

A Special Purpose Vehicle (SPV) is a business or company structure which can be used to buy, hold and manage property.

Through SPVs, landlords are able to acquire property and receive distributed rental income without incurring tax or mortgage purposes in their personal names.

This means that any profit made from the rental property is not subject to income tax in their personal allowance until the point at which any SPV profits are distributed as dividend over and above their annual allowances.

Landlords can also deduct all finance costs from rental income before it is subjected to corporation tax and they can reduce their tax liability by claiming additional tax relief on their mortgage interest. This means that the landlord’s tax bill is reduced and any profits made through selling the property are taxed at a lower rate than if held in a personal name.

As well as reducing corporation tax, SPVs also have the added benefit of reducing overall income tax for higher rate taxpayers as all mortgage interest payments can be offset against rental income before being taxed at the higher rate of 40% or 45%. A further benefit of setting up an SPV is that a director’s loan can be used to cover any shortfall in capital for purchasing the property. Any introduced funds can be withdrawn back out of the company, tax-free. There’s also no income tax when reinvesting profits to secure further properties.

SPVs also provide a greater sense of security when it comes to dealing with tenants. If a tenant fails to pay rent for any reason, then the landlord does not have to worry about any legal costs arising from the tenant’s actions being paid out of their own pocket. Finally, SPVs provide lower mortgage rates – most lenders charge lower interest rates and fees for Limited Companies compared to individual Buy to Let mortgages.

There is no Capital Gains Tax (CGT) allowance for limited companies whereas individuals have an annual exempt amount before tax is payable on disposals (18%/28% tax-bracket depending).

There are also additional costs and admin of running a limited company, and landlords are subject to a reduced choice of lenders and mortgages.

NB – for anyone who owns a property personally that wants to transfer this to a limited company, this can be done without having to rebuy the property. However, there are stamp duty implications based on the value transferred which would be corroborated by a solicitor/conveyancer.