Imagine paying £13,500 in tax that you didn’t need to. Unfortunately, that’s exactly what happened to a recent business owner who contacted us for help.

The Background

• Owner of a plumbing and heating business
• Looking to invest in property using business profits
• Found the right opportunity and needed £40,000 to finance it

So far, so good. But here’s where things went wrong…

The Costly Mistake

The business owner had already taken dividends up to the £50,270 higher-rate threshold, meaning any further dividends would be taxed at 33.75%.

Their existing accountant didn’t provide any advice on how to extract the £40,000 from the company tax-efficiently.

With no guidance, they took it out personally and used it to buy the property.

Fast forward 5 months after the year-end, and they came to us looking for advice. By then, the damage was done:

➡️ They now owe £13,500 in personal tax on the extra dividend.

The Simple Solution That Was Missed

They could have avoided all of this with a better strategy:

• Set up a Special Purpose Vehicle (SPV) for the property
• Loan the £40,000 from the plumbing company to the SPV
• No dividend, no tax, and a much smoother investment process

A simple move, with the right advice, could have saved them thousands.

Now they’re scrambling to find the cash to pay the tax bill due in January.

Don’t Let This Be You

If you’re considering investing business profits into property, make sure your accountant understands both:

• Tax-efficient strategies for business owners
• The practicalities of property investment

I do both. I invest in property myself, and I help my clients build strategies that grow their wealth without giving unnecessary amounts to HMRC.

📩 Thinking of buying property through your business? Let’s talk before it costs you.