How I Paid 3% Tax on £64,447

[@L1mar786]

Not sure you make 50K profit after the re-evaluation.. Unless you sell the property. Otherwise your just re-mortgaging.. Thats a liability. No tax required to pay!

[@kenbirkpresents]

Some impressive editing here-did you do this yourself?

[@Eddie123uk]

as soon as you take money out of company to your personal you will be hit by tax on self assessment

[@Thistooshallpass-k6c]

Also, mortgage agreements include early repayment charges (ERCs) or penalties if you pay off your mortgage (or a substantial portion of it) too early. This policy protects lenders, as they expect to earn interest over the life of the loan.

[@ThatAhmedKhan]

Correct. So you need a good strategy to take this money out via personal allowance, dividend allowance, dividends and expenses

[@Eddie123uk]

​@@ThatAhmedKhanthen it won't be 3% tax is it?

[@DilipKumar-o6e5k]

Send money to ur account abroad...

[@soundwave3739]

Your videos are very helpful keep it up

[@ThatAhmedKhan]

Glad you’re finding them useful :)

[@Andy5c]

Your examples for tax don't match up. In the personal name example you have accounted for £200 in maintenance but then not done the same inside the company. So the maths don't equal out. Also the mortgages would never be the same between personal and company (personal always lower by 0.5-1% plus less fees and cheaper accounting) and that's before we get to the point that somewhere down the line you want to spend your money so you are then taxed again.... doing the maths correctly as God knows how you have got it so wrong give you are using a great online calculator. If you are a 40% tax payer in your personal name you would make £530 a month after tax (before expenses) in a company you make £760 it no where near as bad as your terribly worked examples are showing!!

[@devinedude3690]

Well spotted... 😉 Were all holding our breaths - Well ahmed.. your reply

[@ThatAhmedKhan]

In the personal example I accounted for £200 maintenance which meant the profit was £951. When I did the limited company calculation, it was also based of £951 (when I assumed a 19% tax rate) - since the tax was applied to £951 amount, that means the £200 maintenance was accounted for. Correct me if I’m wrong? Also, yes there are accounting fees and accountancy fees, but if someone wants to go into those technicalities, you then also need to consider tax deductible expenses which massively reduce tax + if you have multiple properties then it’s a no brainer as accounting costs are spread. With a 10min video there’s only so much detail you can get into. To make a fully conclusive video on this topic I’d would have to be an hour+ video. Hope that helps!

[@devinedude3690]

@@ThatAhmedKhan fair play - also God bless & many thanks for all your great insightful content over the year

[@lilihuang3963]

If the property was purchased under your personal name, you then transfer it to the limited company. You may incur CGT. The complexities surrounding mortgage loans, i.e. companies tend to attract higher mortgage rate generally. I would like Ahmed's thoughts on these areas. Thanks!

[@ThatAhmedKhan]

That’s correct. The mortgage rate is higher for LTD but (in most scenarios) the benefits of LTD still outweigh the costs

[@jasonpatterson365]

So you initially bought this property in your personal name? Did you incorporate the property into a Ltd company? Or is this flat still in your personal name?

[@zizzu-gz4fg]

so simply explained and easy to break down, thank you for the useful information, I have a question: how can this model you outlined work for lets say a Muslim investor that cant take any interest, are there options available? thank you

[@user-yd3ic3cl3b]

Great video, packed in a lot of information for a 10 minute video! hoping you can help me understand the remortgage bit…… you can remortgage a property that you currently already have a mortgage with? Excuse my ignorance but if you already owe them a mortgage how can you take out another? Please someone explain this to me haha I understand the revaluation….. but doesn’t that just mean your mortgage was reduced by the same amount the property value increased?

[@ThatAhmedKhan]

When you take out the new mortgage, you simultaneously pay off the old mortgage with the funds from the new mortgage :)

[@devinedude3690]

Well spotted... 😉 Were all holding our breaths - Well ahmed.. your reply

[@ThatAhmedKhan]

Replied :)

[@alizaman8783]

you didnt account for your capital investment under limited company 82500, you can take directors loan of that money.

[@ThatAhmedKhan]

I didn’t account for it because you ultimate have to repay those funds

[@Mumtaz-gp2dx]

thanks for sharing