{"id":310,"date":"2021-08-18T17:37:00","date_gmt":"2021-08-18T16:37:00","guid":{"rendered":"https:\/\/holidayletmortgageuk.com\/?p=310"},"modified":"2021-09-13T12:33:14","modified_gmt":"2021-09-13T11:33:14","slug":"holiday-let-incorporations","status":"publish","type":"post","link":"https:\/\/holidayletmortgageuk.com\/holiday-let-incorporations\/","title":{"rendered":"Holiday let incorporations hit a record high during staycation boom"},"content":{"rendered":"\n

As the holiday let sector goes from strength to strength, there has been a spike in the number of new holiday let companies being set up. What are the benefits of incorporating?<\/p>\n\n\n\n

In recent months, there has been surging demand and high returns for holiday-let investments. Currently, appetite for staycations across the UK is stronger than ever before. More investors are entering the short-term rental sector or growing their investment in the field. At the same time, the number of holiday let incorporations has increased too.<\/p>\n\n\n\n

During the first six months of 2021, there were 1,404 new holiday incorporations in England, Wales and Scotland. This is the highest figure since records began back in 2007, according to research by estate agency Hamptons. It\u2019s also 83% growth on the number of holiday let incorporations in 2020. And it\u2019s even 119% more than in 2019.<\/p>\n\n\n\n

In the past year, the number of companies set up to hold buy-to-let properties has also increased. The sector continues to professionalise and adapt to tax changes. This includes changes to mortgage interest tax relief. However, despite this, buy-to-let incorporations is growing at only half of the rate of holiday lets.<\/p>\n\n\n\n

Contact us today to speak with a specialist Holiday Let Broker<\/a><\/strong> to discuss how we can assist you<\/em> <\/p>\n\n\n\n

Benefits of incorporating<\/strong><\/p>\n\n\n\n

A property that qualifies as a furnished holiday let is considered a trading business. Because of that, there is no limit to the amount of mortgage interest the owner can offset against profits. This provides tax benefits whether investors incorporate or not.<\/p>\n\n\n\n

Instead, the benefits of incorporating a short-term holiday let is predominately the fact that the owner pays corporation tax instead of income tax. Currently, corporation tax is 19%. And income tax can be up to 45%.<\/p>\n\n\n\n

This makes incorporating particularly advantageous for higher-rate taxpayers. While sometimes investors can face limitations with how to withdraw money from a company, there is a dividend allowance every year.<\/p>\n\n\n\n

Additionally, if a limited company is then sold to another investor, stamp duty is only 0.5%. Incorporating a holiday home can also help with inheritance tax planning.<\/p>\n\n\n\n

Overall, incorporating a holiday let can be an important stepping stone to building a holiday let business. Holding your portfolio in one limited company means you can then use the profits from one property to buy another.<\/p>\n\n\n\n

What to consider<\/strong><\/p>\n\n\n\n

Hamptons research shows that 93% of active holiday let companies have only one mortgaged property. For buy-to-let companies, this figure is much lower at 45%. There is often debate whether it\u2019s better for investors to purchase property as an individual or limited company. It really depends on your specific situation and investment strategy.<\/p>\n\n\n\n

There are pros and cons for incorporating. Tax advantages have often been big draws for investors. However, mortgage rates are usually higher for limited companies than individuals. A limited company structure can also create extra admin tasks.<\/p>\n\n\n\n

It\u2019s important to weight up the obligations and costs with any tax benefits and savings. Seek out professional advice to help you decide if starting a limited company is right for you. For further information, we can put you in touch with an independent tax expert.<\/p>\n\n\n\n

By Kaylene Isherwood<\/em><\/p>\n\n\n\n

Source: Buy Association<\/a><\/p>\n\n\n\n

Discover our Holiday Let Mortgage Broker<\/a><\/strong> services.<\/em><\/em> <\/p>\n","protected":false},"excerpt":{"rendered":"

As the holiday let sector goes from strength to strength, there has been a spike in the number of new holiday let companies being set up. What are the benefits of incorporating? In recent months, there has been surging demand and high returns for holiday-let investments. Currently, appetite for staycations across the UK is stronger […]<\/p>\n","protected":false},"author":2,"featured_media":144,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[3],"tags":[12,6,4],"acf":[],"yoast_head":"\nHoliday let incorporations hit a record high during staycation boom<\/title>\n<meta name=\"description\" content=\"As the holiday let sector goes from strength to strength, there has been a spike in the number of new holiday let companies being set up.\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/holidayletmortgageuk.com\/holiday-let-incorporations\/\" \/>\n<meta property=\"og:locale\" content=\"en_GB\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Holiday let incorporations hit a record high during staycation boom\" 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