Funding Many of our clients have preferred to purchase their units at Apollo Park by using their SIPPs as the purchase vehicle.
This is the most tax-efficient way in which to purchase your unit and the figures below show the benefits from doing this as opposed to leaving the funds in your business and paying corporation tax in the normal manner.
With the tax rebate at 40% for higher-rate taxpayers, effectively George Osbourne is helping to fund your office with a 40% government contribution – worth taking advantage of while you still can!
Even greater savings than above if the purchaser is a 50% taxpayer
Apollo unit cost £180,000 + costs say £185,000
| 1. Company purchase |
|
| Company Profits per annum |
50000 |
| Corporation Tax at 21% |
-10500 |
| Net funds in company to invest in property |
39500 |
|
|
| Time to purchase |
4.7 years |
| Future Capital gains tax rate |
21% |
| 2. Director's personal purchase |
|
| Company Profits per annum |
50000 |
| Corporation Tax at 21% |
-10500 |
| Dividend to director (more tax efficient than salary because of Nat Insurance) |
39500 |
| Higher rate tax payable (25%) |
-9875 |
|
29625 |
|
|
| Time to purchase |
6.3 years |
| Future Capital gains tax rate |
18% |
| 3. Self Invested Personal Pension (SIPP) |
|
| Company Profits per annum |
50000 |
| Pension contribution |
-50000 |
| Corporation Tax at 0% |
0 |
| Net funds in company |
0 |
|
|
| Funds in SIPP |
50000 |
| |
|
| Time to purchase |
3.7 years |
| Future Capital gains tax rate |
0% |
| Future tax free sum available to be drawn |
25% of fund |
Please note that financing costs will follow the same pattern as above.
|
