Fred
The Property Developer

Fred’s property portfolio

just got bigger

Fred runs a plumbing business but was always interested in residential property to help build his pension fund for his future.

Fred has been advised by his accountant that because of changes to taxation rules on buy to let, residential property investing is more tax efficient through a limited company. Fred instructs his accountant to register Fred’s Property Co

Fred has around £100,000 built up as cash reserves in his business and needs to keep operating cash of £30,000. He has taxable profits in his business each year of around £60,000.

Fred sets up a SSAS with Retirement Capital, who consult with him and his accountant on ensuring it is the right fit for his taxation and business requirements.

Fred contributes £50,000 from his plumbing business, which means that his company tax bill will reduce from £9500 to £1900 for the year (19% corporation tax rate for small business).

Fred now has £50,000 in his pension scheme bank account. Fred has a pension from a previous pension scheme of £50,000 and after taking regulated financial advice transfers this money to the SSAS. There is now £100,000 in his pension bank account.

Fred has around £100,000 built up as cash reserves in his business and needs to keep operating cash of £30,000. He has taxable profits in his business each year of around £60,000.

Fred sets up a SSAS with Retirement Capital, who consult with him and his accountant on ensuring it is the right fit for his taxation and business requirements.

Fred contributes £50,000 from his plumbing business, which means that his company tax bill will reduce from £9500 to £1900 for the year (19% corporation tax rate for small business).

Fred now has £50,000 in his pension scheme bank account. Fred has a pension from a previous pension scheme of £50,000 and after taking regulated financial advice transfers this money to the SSAS. There is now £100,000 in his pension bank account.

Following building works the property is sold as an HMO for £155,000. Fred is delighted!

Fred’s Properties Limited pays back the loan to his pension scheme, which he can activate online. Alderhouse Bank are repaid their borrowing on the sale of the house with interest too.

Fred’s profit is £33,000 on the transaction.

This is made up as follows:

Property Price £97000
Legal costs on purchase £2000
Development and Finance costs £20000
Less Resale Value -155000
Less Legal and SSAS Interest costs on the sale £3000
Profit £33,000
Return on Investment 27%

Fred contributes £30,000 profit into his SSAS bank account, which means that Fred’s SSAS has now £132,500.

Fred has online access to his money and uses Retirement Capital’s property search tool with Zoopla to find the next deal.

Fred now decides to find another development to build his pension fund from residential property developing.