Save tax using Limited Liability Partnerships (LLP)
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- čas přidán 28. 03. 2021
- Partnership Act 1890: www.legislation.gov.uk/ukpga/...
Watch here: • Save tax using Limited...
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In this video you will learn from Simon Misiewicz, your property tax specialist, of Optimise Accountants
▶ What is a limited liability partnership (LLP)?
▶ Who can use a Limited liability partnership (LLP)
▶ How does a LLP help you save tax?
▶ What legal protection does a LLP provide you?
▶ What is the criteria for setting up an LLP?
▶ Who can be members of an LLP?
▶ What is the difference between a Limited Liability Partnership and a limited company?
▶ What is the difference between a Limited Liability Partnership and standard partnership?
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Great content as usual Simon, people often talk about the LLPs being better for putting company cars and other benefits through - maybe you could cover this sometime?
I can certainly look into this for sure
thank you very useful information
I am pleased it was useful
Superb
Thank you, most kind
Hi Simon have you commented anywhere on the legality/feasibility pf Hybrid LLP's whereby one of the partners is a limited company? Thanks
I would not set up a hybrid tax structure with a partner being artificial entity. HMRC have won one case already and has now set the precedence
Great video, finding your content very useful.
Question:
If I incorporate my BTL properties into an LLP. Am I still classed as owning the properties with regard to paying the 2nd property surcharge when I buy my next residential property?
Many thanks.
A property purchased in a LLP is a separate entity than the owner. Each investment made in the LLP would be subject to the higher rates of SDLT.
If a property is owned in a LLP or is not owned by the individual so the individual buying one property where they have not owned a previous property would not be subject to the higher rates of SDLT
That all said I do expect HMRC to challenge this notion. This is because the LLP is taxed on personal income tax rates not corporate tax.
It is less debatable to buy properties in a LLP or incorporate into a LTD.
@@Simon-Misiewicz-US-UK-TaxesThank you. So just to confirm, if the legal ownership has not been changed on Land Registry then technically I still own the properties (even though they’re in an LLP) so will incur the 3% surcharge on my next residential purchase?
You need to get specialist advice as there may be some ways to mitigate this and avoidable trip ups
@@Simon-Misiewicz-US-UK-Taxes thank you! Looking forward to more videos 👍
it's not clear to me how the taxation works
if an LLP with three partners generates 300K in a fiscal year and the partners agree to pay out 70K each (210K) what is the remaining 90K subject to? can it remain as reserves in the LLP until such time as it the partners decide to issue it?
The profits of an LLP must be distributed to all three members and Tax accordingly
would a LLP be suitable for a pair of tradesmen wanting to start a company?
I cant distinguish between LLP & LTD company.
Possibly but I can’t comment too much unless I know the extent of your activities
Thanks for this. Is a LLP subject to National Insurance tax?
A limited liability partnership is subject to national insurance. The reason being is because it is tax on your personal self-assessment tax return. This is particularly case where you are a trader business.
Thanks Simon, in the example what if Sarah already has another full-time job and earn a salary of eg £52k pa, does it mean that all of her £40k share of the LLP income will be subjected to the 40% tax?
That is correct, LLPs do not have a tax advantage
Thanks for the video..but I am not sure I understand : let's suppose an LLP is setup by 2 partners (1 PSC and 1 designated member), and then 98 non designated members are added, which makes 100 partners. if the company makes 10 million in profits, what is the share of each in terms of profits, and are you saying the the basis for personal allowance that will be taken into account for the calculation of the taxes on profits will be 1250000 (12500*100)? thank you
It is the partnership agreement that defines how the profits are split.
The capital does not need to be the same as the profit split of the company, but that does need to be there a commercial justification for the variance
Okay clear thanks, so we agree that the profits are taxes depending on each members share of profits, and so that the personal allowance is the one applied to each individual (12,5k) and not the sum as depicted in the video?
What’s the treatment of finance costs in a LLP for a BTL ‘business’ is the 20% tax credit still available?
It is the same 20% tax relief as LLPs are taxes on personal tax returns
Thanks Simon - HMRC notes seemed to say it was just for holiday lets (probably changing after budget anyway!) - so good to get the clarification that it’s for residential too👍
@stephenclark6811 agreed it will be subject to s24 mortgage interest relief cap 😔
how to set up? and what is the typical cost to set it up? do I need tax advisor or an account to et it up? can I do it myself?
You can do it yourself if you are comfortable that you know the share classes. We charge £499.95 for tax advice and company set up
@@Simon-Misiewicz-US-UK-Taxes was asking about LLP not ltd
Same applies