Property prices go up as well as down, so you might not get out what you put in. The same goes for how much rent we collect. Our forecasting tools help with the guesswork but they're not a reliable way to predict the future. Please also note that invested capital is illiquid and is not protected under the Financial Services Compensation Scheme.Ok, got it
Every property investment in UOWN is owned by a UK limited company (SPV). Corporation tax is payable on the taxable profit made by each SPV, this profit is calculated by deducting all the costs from the total rental income (gross rent). The Corporation Tax rate in the UK is currently 19%, as at May 2018. This corporation tax figure is already accounted for in the net rental yield figure.
In addition, should the property price increase, Corporation Tax is payable on the gain when the property is sold. This future Corporation Tax liability is recognised in the valuation of the SPV and is called Deferred Tax.
For example, if the property valuation increased by £1,000 over then £190 (£1,000 x 19%) would be recognised as a Deferred Tax liability, which in turn is reflected in the investment value and share price.
Recognising deferred tax means that the investment value reflects the real value of the property to the UOWNers. It would be unfair if the people at the end of an investment term were whacked with a big tax bill that they had to pay because they were the last ones that owned shares in the property. With the way we have chosen to defer tax, we try to ensure that everyone pays their fair share of tax and the goal is that no one pays less or more than they should.
Stamp Duty Land Tax
Purchases of a secondary residential home or purchases of properties by companies and non-individuals (such as our SPVs) are subject to the additional 3% Stamp Duty Land Tax. This figure is added onto the investment value when we list any property on the platform.
UOWNERs can access our tax statement generator through the dashboard. These are to assist you with any tax returns, and provide a summary of dividends received and capital gains generated over a specified period.
Please note that tax rates are subject to future change, and the above does not constitute tax advice. We do provide any tax advice and if you are not certain then you should consult an accountant.