We have a rental property (in sole ownership) and are looking to buy a second one. We are looking for information on what would be the best option: sole owner, a limited company (which would mean transferring our current one) or a trust fund. Is there a simple answer? 

Arthur Weller replies:  

I don’t know your circumstances. However, if after buying in a limited company, you intend to extract all the post-corporation tax profits as dividends, this is not a tax-efficient idea if you are a higher-rate taxpayer, since the combination of corporation tax and dividend tax will result in more tax being paid than if you bought in personal ownership. The income tax rate for discretionary trust is 45% on rental income.  

The optimum solution would be to buy the property in the name of a basic rate taxpayer, for whom the receipt of the rental income will not cause them to pay higher-rate income tax.  

But, of course, there are a number of other considerations that need to be taken into account.