Transcription
In this video, you're going to learn 10 loopholes how to completely legally avoid paying tax structured according to the HMRC here in the UK.
Disclaimer, I am not an accountant and I am not qualified to give tax advice. But all of these 10 ways I have personally had experience in, but I would always advise use this video to get the juices flowing and to give you the ideas and then speak to your accountant and get your accountant to sign them off because the laws are always changing. I don't know when you're going to watch this video and also the rules might be slightly different for different companies. But these are the 10 ways that have saved me personally millions of pounds in tax.
Let's talk about capital gains tax. Capital gains tax is when you buy a property and then the property goes up in value over the years or maybe you force the value up on the property and then you sell. When you sell the property, you're going to get hit with capital gains tax. However, you can be exempt from paying capital gains tax on a property if you lived in the property. This is called the live in it strategy. And you can keep doing this over and over. You can buy a house, live in it, do it up, sell it, make £100,000 tax-free, and then use that to buy another house, live in it, and continue to do this again and again, completely tax-exempt.
Number two, inheritance tax. If you own lots of properties, when you die, your kids will pay up to 40% inheritance tax on everything that you leave behind. And this can be devastating. That's why if you have a company, namely a property development company that makes most of its money from trading income, buying and selling, developing, any properties that your company owns and leaves to your children will be completely exempt from inheritance tax because you don't pay tax on companies if it's a trading company, even if it just so happens to own some houses as well. Of course, get this checked out by your tax accountant, but this is what we call wrap it up in a company to save on the 40% inheritance tax rule.
Number three, capital allowances. What are capital allowances? Well, when you've got properties, particularly commercial properties, and you're refurbishing them, there's loads of stuff that you can claim back completely tax-deductible under capital allowances. So, next time you're doing a hefty refurb, particularly on a commercial property, make sure that you speak to a capital allowance expert, and claim back every penny you can. I've personally saved millions of pounds in taxes when refurbishing my hotels, my service accommodation units, my commercial properties, and you too need to learn about capital allowances.
Number four, SAS pensions. This is where you set up a SAS pension fund, and you can do this even if you're just aged 18. And you can put your profits from your business into your SAS pension. All the money that you move across into your SAS pension fund is 100% tax deductible. Which means if you make £50,000 profit in your business, you move it across, you now pay no tax. But your SAS fund can now start investing in hotels, in land, commercial properties, and all the profit that it makes, it will pay no tax as long as it stays in its SAS fund. This is a way that you can grow wealth completely tax-free and leave generational wealth behind to your family, to your loved ones in a very tax-efficient way.
Number five, become your own tenant. This is something I've done many times and saved hundreds of thousands of pounds on tax. Let me give you an example. Let's say you buy a hotel like I did, Willingham House. You rent the hotel to your own company, which is a management company. Now the management company does the refurb on the hotel and it might cost say £300,000 to get the hotel ready. But now the management company is at a loss £300,000. So all the money that the management company now makes, all the bookings that it takes, well until it gets above £300,000, you're going to pay no tax because you can write that loss off as tax deductible. This is called renting it to yourself.
Next, number six, stamp duty exemption. When you buy a property, you're typically going to have to pay 5% stamp duty tax. So, if you buy a house for 100 grand, that's £5,000 stamp duty. But if the property is uninhabitable, if it's derelict, if it's totally unlivable, then that means that you can be completely exempt of paying your stamp duty. And not only will you save £5,000, but if you've paid stamp duty in the past few years when you necessarily didn't have to, you can actually claim it back and get a cash refund with interest from the HMRC.
Number seven, pay yourself a salary of just £125,000. Why? Because it's tax-free. If you've got a company and you pay yourself a small salary of £125,000 and then the rest if you want to pay yourself 50 grand, the remaining 375,000 you don't take out as a salary, you take out as a dividend and you pay considerably less tax.
Number eight, employ your family. Guess what? Your family can also take out a salary of £125,000 as well, which means that it's also tax-free. So you can employ your wife. You can even employ your children. I've got four kids. That would be 12 and a half, 12, 50 grand tax-free. The problem is my kids are a bit too young and they have to be 13 years old to be able to give them a salary. But still, as soon as they get 13, guess what? They're all taking out a salary and then they can pay for their own Disneyland. Thank you very much. But tax-free.
Number nine, we call this give it all away strategy. If you give money to charity, it's tax-deductible. So, when I put money into the Samuel Leeds Foundation from my business, not only am I helping the community and giving back, but I'm also saving on tax. Also, you can give away your money to your kids. Instead of paying 40% inheritance tax, if you've got a lot of money, you can give it to your kids before you die and then you save on tax. There is a caveat though. If you give all your money to your kids, you can't die within seven years because then they that they can reclaim the inheritance tax. But if you give it away, live seven more years, and then die, it's completely tax-free.
Number 10 is you can see it. Put your branding on your clothes. Instead of buying expensive clothes and having to pay yourself, why not buy clothes and put your own brand on it? And that way, you're promoting yourself. You're promoting your brand, but also it's tax-deductible. So, not only is the branding behind me tax-deductible, in fact, this whole room and this table and this is all tax-deductible, but even my clothes tax deductible because they've got my branded logo on them.
But most people's problem is not saving on taxes. Most people's problem is making the money in the first place to be able to then save on taxes. But you need to be able to make your money in such a way whereby it's built in a structure whereby then when the money starts coming in, the wealth starts coming in, you can legitimately not pay much tax. And that's why I'm running a webinar which is completely free. It's a free online training you can do from your own home. And I'm not going to be talking about tax per se. I'm going to be talking about how to build a property business from scratch and how to make a million pounds but not pay any tax on that million pounds completely legally. If that's caught your interest, click the link below in the description. Sign up for my next webinar. It's completely free and I can't wait to see you there. There is limited spaces because we can only take 500 people per webinar because the system won't allow more and I don't know how long I'm going to keep running these for. So, make sure that you click the link below, get registered, and I'll see you on the other.