Keep, sell or move to a company

What it shows

Each home you own in your own name has a Keep, sell or move? card on its page, under If you sold it. It puts three choices side by side, each as the money it leaves you in a year, after tax:

• Keep it: the rent, less the running costs, the mortgage interest and the income tax on the profit.
• Sell and save the cash: what you'd keep from a sale today, after the mortgage, the selling costs and capital gains tax, then a year of interest on it in savings, less income tax on the interest.
• Move to a company: your own company buys the home from you at today's value. You pay capital gains tax and the company pays stamp duty (Land Transaction Tax in Wales) at the higher rates, plus the cost of the move. The yearly figure is what the company keeps after corporation tax. The card says how many years the company's extra profit takes to earn back what moving costs.

The line at the top says which of keeping and selling pays more, and by roughly how much a year. Everything is at today's value: we don't guess where prices go. Nothing on the card is saved, so you can try figures without changing anything.

Where the figures come from

The card uses what the home already holds, so it matches the rest of the page:

• Value now, mortgage owed and rate, and your share come from the home's details.
• Rent is the rent you've recorded in the last 12 months, once your records go back about a year. Before that, it's your rent a month for a year.
• Running costs are the last 12 months of costs recorded for this home that count for tax: insurance, repairs, agent fees, the accountant and so on. Mortgage interest isn't one of them, because it's worked out from what you owe at your rate. Costs recorded for the whole portfolio aren't counted, because they aren't this home's.
• Mortgage interest is a year at your rate on what you owe, whatever kind of mortgage it is. Paying off the loan itself isn't counted as a cost, because that money stays in the home. If your payment a month is more than the interest, the card says roughly how much a year goes to paying off the loan.
• The sale is worked out exactly as If you sold it does, with the improvements and buying costs it starts from.
• England or Wales comes from the postcode, or from the deal you bought it from.

If the card asks for something first, such as the value now or the mortgage rate, add it with Edit details.

Changing the figures

Open Change the figures to put in your own:

• Your other income this tax year: salary, pension and profit from your other homes. It decides your tax rate on all three choices. Leave it empty and every tax is worked out at the higher rate. It's never saved, so type it each time.
• Selling costs: the estate agent and solicitor, and any early repayment charge on your mortgage. It starts at 1.5% of the value.
• Savings rate: what the cash would earn before tax. It starts at 5%.
• Cost to move: solicitors, the company's mortgage fees, and any early repayment charge on your mortgage. It starts at £3,000.
• Company costs: an accountant and filing for the company, a year. It starts at £800.
• Price change a year: your own guess, if you'd like one. Its effect shows as a separate gain on paper, apart from the cash.

The starting figures are only places to begin. Your own quotes will be better. Open How it's worked out to see each part of the sum.

Joint homes and company homes

For a home you own with someone else, keeping and selling are worked out at your share, taxed on your own income. Moving a joint home into a company changes both owners' tax and the company's, so the card doesn't work it out. Owning a buy-to-let with your partner explains how a joint home is taxed.

A home a company already owns has no card. Selling from a company means corporation tax and then the cost of taking the money out, so ask your accountant for those figures.

What it doesn't count

• Incorporation relief, which can put off the capital gains tax for some landlords who run their lets as a business. Moving your buy-to-let into a limited company explains who can claim it.
• Higher mortgage rates for companies, and the cost of taking money out of a company later.
• Other gains or losses in the same tax year, and Scottish income tax rates.

It's a guide to the choice, not advice. Talk it through with your accountant before you sell or move a home.