Second income

[Skyedriver]

Hope this is the right forum.....
Have a job as an employee on PAYE
Have the option of a second part time job, small income, what is the best way of playing this for tax & NI? Sole trader? Ltd Company? I am out of my depth when it come to matters of this nature.
As a follow on, if I/we were to let out a property, should we do that as a LTD company or what?
That could be 3 separate incomes which kinda makes me think of doing it as a company thing
Any guidance appreciated.

[rog007]

Unless you're talking megabucks and involving staff or capital equipment, it's just a matter of filling in your self assessment tax return in and keeping accounts. Simples!

[Eric Mc]

What levels of income are you talking about?

[Skyedriver]

Second job, £1450pa (said it was small)
Property rental ????? maybe £6k pa

[Eric Mc]

Secomd job - income so low, forget about the limited company route.

Rental income - that is not taxed under the self empployment rules anyway. Rental income has its own set of rules regarding calculation of rental profits and allowability of rental losses.
My general adcvice is that, unless you are running a large portfolio of rental properties, you should keep rental properties outside of limited companies and in your personal name (or joint names with someone elkse if that is an option).

[RemainAllHoof]

Eric, what about from the viewpoint of inheritance tax if someone only owns one extra property? I suppose the taxman will still question the donation of several hundred thousand pounds to a business upon the individual's death as the loan will form part of the estate?

As a general rule, how does the taxman view sizeable loans to Limited Companies with respect to inheritance tax?

[Eric Mc]

RemainAllHoof said:

Eric, what about from the viewpoint of inheritance tax if someone only owns one extra property? I suppose the taxman will still question the donation of several hundred thousand pounds to a business upon the individual's death as the loan will form part of the estate?

As a general rule, how does the taxman view sizeable loans to Limited Companies with respect to inheritance tax?

Inheritance tax is not my area - especially any sort of Inheritance Taxx planning.
I would expect that an individuals#s estate is based on the value of whay they owned at the date of death - whether it be the value of l;and and property or teh value of a company that they owned that owned the same bricks and mortar.

I was thinking more in terms of Capital Gains Tax and Corporation Tax, which is generally less beneficial in terms of property ownership through limited companies rather than personal ownership due to loss of CGT allowances and higher rates of Corporation Tax on rental income.

[Skyedriver]

Eric Mc said:

Inheritance tax is not my area - especially any sort of Inheritance Taxx planning.
I would expect that an individuals#s estate is based on the value of whay they owned at the date of death - whether it be the value of l;and and property or teh value of a company that they owned that owned the same bricks and mortar.

I was thinking more in terms of Capital Gains Tax and Corporation Tax, which is generally less beneficial in terms of property ownership through limited companies rather than personal ownership due to loss of CGT allowances and higher rates of Corporation Tax on rental income.

Sadly this is now all going completely over my head.....Need to find a book like "A dummies guide to tax"

[Eric Mc]

Make sure it's up to date. Tax rules change at least once a year (or sometimes more than once, as was the case in 2010).