Cheat code your way to paying no tax . . . Legally
reduce tax legal
Dear Reader,
Introduction:
I will be sharing the biggest cheat codes that I have found so far in the next coming chapters. Please keep in mind that I am still young (28 years old) and will be sharing some hard facts about myself. As Bruce Lee says, "take what is useful and discard what is not."
I believe that there is always a solution to any problem, and the only person who can save you is yourself. You cannot change your circumstances, but you can change yourself. "The quality of your life depends on the questions you ask yourself" - Tony Robins. Instead of saying that you can't do something, break the problem down.
I was working approximately 60-70 hours a week as a police officer with a salary of around £33,000 a year. I knew I wanted to own property all over the world, but I had no idea how to achieve this. Therefore, I started studying everything I could about real estate or personal finance, did about 40 hours of research per week (while still working full time), and spoke to everyone I could that had experience in property, business, or was thinking about property.
Before I knew it, I started solving problems for people who were in property and business much longer than I was.
Client 2:
The UK has been struggling with building enough residential properties for the growing population for a while now. They are supposed to build 330,000 new homes every year to keep up with the demand but are always approximately 100,000 new homes short. To help solve this problem, they have created a tax law incentivizing people to buy and convert commercial properties into residential properties. In a nutshell, you can earn up to £1,000,000 a year tax-free if you convert a commercial property into a residential one (explanation below).
Case Study example: If you are an employee in London, you would have noticed a tax code in your payslip, last checked was something like 1257L. That means you can earn roughly £12,570 tax-free in the year. If you buy a shop for £100,000 and convert it into a house, the government will add up to £66,000 (2/3rds) to your tax-free allowance. Meaning if you earn £33,000 a year from your job, you can now take that money tax-free for the next two years. (more on commercial real estate in the upcoming blogs)
Chapter 3:
The good stuff "It's not how much you make, it's how much you keep" - Robert Kawasaki.
There are countless ways to generate money to buy commercial property. One of the best ways I think is through your pension. Instead of letting some smuck "manage" and "invest" it for you, leaving you with less money per month than you are struggling to live on now, when you are old and sick. Instead grow it into something and retire faster with more money every month.
You can contact your pension company and move it into a private pension, also known as a SIPP pension. A SIPP pension is a Self-Invested Personal Pension, which is a type of personal pension in the UK. It allows you to manage your own investment portfolio, giving you control over how your retirement savings are invested.
With a SIPP, you can choose from a wide range of investments, including stocks, bonds, funds, and other assets. This gives you more flexibility and potentially higher returns than traditional pension plans that limit your investment choices.
SIPPs also offer tax benefits, such as tax relief on contributions and tax-free growth on your investments.
Strategy no one talks about:
Use your pension to buy commercial property and do most of the work until it is nearly residential ready
Create a company, get a mortgage from the bank to buy the property from yourself (making your pension pot grow and buying it at a discounted rate from yourself)
Make it a residential property (just fill out the forms)
Sell It or rent it, get the tax benefits and profit from the project
Where to find commercial property?
There are countless commercial properties out there, best ways to find them is to call a commercial surveyor in the area that you are looking for and ask if he has seen any that might be suitable for what you are looking to do. As commercial surveyors have seen countless commercial properties and will be able to provide invaluable contacts and direction into finding something suitable.
Using your pension is just one option to finance a commercial to residential project. In the UK, there are several government-backed loan programs that may be available to finance commercial to residential projects.
These include:
The Business Finance Guarantee Scheme: This scheme provides government-backed guarantees for loans to small and medium-sized businesses that have been affected by the COVID-19 pandemic.
The Enterprise Finance Guarantee (EFG) Scheme: This scheme provides guarantees on loans to viable businesses that have been turned down for a loan or other form of debt finance due to insufficient security or a lack of trading history.
The Start Up Loans Scheme: This scheme provides loans of up to £25,000 to new businesses or businesses that have been trading for less than two years.
The Development Finance Institutions (DFIs): These are government-backed institutions that provide financing to businesses involved in infrastructure projects, such as real estate development.
It's important to carefully review the eligibility requirements and terms of each loan program to determine which one is the best fit for your needs.
Disclaimer:
There are way too many ways to reduce tax and this may not the most efficient way for your own circumstances. I will be discussing more tax efficient ways that the rich reduce their tax in coming blogs along with links to contract templates. This is not financial advice nor am I a financial advisor, seek your own advice in regards to your own circumstances.
Kind regards,
Mr Cheat Codes