Tax Planning for GPs
How can I make sure I pay less tax?
Tax planning for GPs always depends upon your personal and financial circumstances. There is no ‘one size fits all’.
That is why we work so closely with our clients to understand the sources of income and expenses and make sure we reduce the tax liability.
Having said that, these are some questions we are frequently asked.
Can I pay my spouse a salary or a pension contribution out of my practice income?
The short answer Is YES. If you pay your spouse a salary or a pension contribution at a commercial rate for the work they do for your surgery, HMRC will not object.
Depending upon your individual circumstances this could save a significant amount of tax.
You can find out more on our Paying Family Members page.
I understand individuals pay more tax on ‘buy to lets’ than companies, so could I transfer my small ‘buy to let’ portfolio to a limited company?
Broadly speaking, limited companies get a full deduction for the interest charge on a ‘buy to let’ mortgage, whilst a higher rate individual tax payer does not.
However, if an individual transfers a small ‘buy to let’ portfolio to a limited company, the transfer may:
- Trigger a capital gains tax charge.
- Create a stamp duty charge.
- There is also the potential difficulty of persuading a lender to move the ‘buy to let’ mortgage to the limited company.
For these reasons, we would not normally recommend you transfer your small ‘buy to let’ portfolio in this way. The advice may be different if you have a substantial residential property rental business.
Nothing noted above should be construed to be tax advice. In all instances you must take tax advice from a professionally qualified advisor who will advise on your individual circumstances.
