Benefits of buying a property in person may not help that much. It is wise to buy properties in Dubai via companies. Approaching companies to assist us in buying properties in Dubai gives us tax benefits. Without a company’s aid, we would end up shelling out a massive sum as tax.
Rewards of using a company to invest in Properties in Dubai
The benefits of using a company to invest in properties fetches benefits in corporation tax rates and dividend tax rates. These taxes are considerably lower than the income tax and tax rates in capital gains. Below are some benefits of holding a company for a property buy, to learn more visit aurum-re.com
– Shifting the Ownership
For instance, you want to shift a property to your family member, it will incur a capital gains tax liability if confined outside the company. However, if you have the property deal within the company, your family member can subscribe for some shares.
If this is done, then the ownership can pass to your family member tax-free. The value of the transfer can be held over for capital gains tax purposes.
– Low Tax Rates
As a higher rate taxpayer, you pay 40% on your profit and gains. For a company, the tax rates are between 0% and 30%, which is a substantial saving!
Dividends are profits, that are paid by the company to its shareholders. Dividends does not attract National Insurance contributions in the present legislation. This can be used to determine the amount of earnings you receive each year. So some years you may take money and some years you may not. The tax is paid on the amount you take. Irrespective of whether you want it or not, you are taxed on your whole income. Though dividends are taxable, the rates are lower than the capital net gains, just in case you plan to sell the property under 10 years of ownership.
– Property Development Profit
Property development is a deal. With the aid of a company, the profits are handy that can be used for the future investment. If you do not hold mortgage on the property, then the amount can be channelized towards the deposit of the other property under the name of the company. The profits will be anyway liable for cooperation until you deposit the amount before the end of the tax year. The amount can also be used as profits, that can be declared as dividends.