I am a higher rate taxpayer. I have read an article that says that if properties are moved into a limited company, HMRC may levy a tax as a percentage of the holdings of the company, which would undermine the potential gains of operating via a company as opposed to owning the buy-tolets as an individual.

Arthur Weller replies:
There are usually three obstacles to transferring residential investment properties into a limited company: (1) usually this triggers capital gains tax for the transferor; (2) usually this triggers stamp duty land tax for the company, based on the market value of the property (plus the 3% ‘surcharge’); and (3) frequently there is a mortgage on the property, and there can be difficulties in transferring the mortgage to the company. However, holding a residential investment property in a company has the following advantages: (1) it does not have the problem of restricting interest relief offset against rental income that individuals will have to face from April 2017; (2) the rate of corporation tax on profits is currently 20%, due to drop to 19% in April 2017 and to 17% in April 2020.