Why put your investment property into a company?

The latest Budget has removed the tax advantages of putting your property into a LAQC (Loss Attributing Qualifying Company) – it used to be that after depreciation, you could make an “on paper” loss on your property, and use it to reduce your tax liability on your other income.  But if you made a profit, you paid tax at company tax rates, which was an advantage if you earned enough to be in the top tax bracket.

But there are still good reasons for having your investment properyt in a LAQC.  Having your investment “ring-fenced” can save you from risking your other assets if things go badly wrong.  For example, imagine that a slow leak from your poorly-maintained plumbing has caused a slip which has destroyed the neighbouring house, and their insurance company is suing – if you own the property in your personal name rather than a company, then all your personal assets such as your family home could be on the line.

Also, if you enter into a new relationship after purchasing the property, or buy it with money you have inherited, and don’t want it to become matrimonial property, having it owned by a company is worth checking out.