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Income distributions

How often are income distributions made?

Unless otherwise stated, all distributions are made monthly. Exact timings can vary depending on rent collection.

How much will be distributed each month?

The amount the contingency balance is in excess of the contingency target, unless more than one months rent has been paid in advance.

What deductions are made from the monthly income?

Deductions are made for three three categories of costs:

Category 1

Known monthly costs of a fixed nature, including management fees, ground rent, Assetz Exchange monitoring fee, etc. These will be deducted each month from the gross rental income before distribution to investors.

Category 2

Known costs of a variable nature, including service charge, property insurance, corporation tax etc. An estimation of these costs will be accrued for and deducted each month from the gross rental income before distribution to investors. When a bill is paid, any under/over accrual will be deducted/added.

Category 3

One-off, exceptional costs, including letting fees, maintenance costs, council tax and utility bills, sundry expenses, capital expenditure, etc. As these costs are unpredictable they will be deducted from the gross rental income prior to distribution to investors in the month they are incurred, lowering the net return to investors for that particular month, as is normal with a traditional buy-to-let property.

Do you provide annual tax statements?

Yes. You can view your tax statement by selecting Tax statement from the Reports section.

Why is some income classified as interest income and some as dividend income?

If the income produced by the property is variable (i.e. determined by the performance of the underlying asset such as under an assured shorthold tenancy (AST)), then the interest for the company is not deemed tax deductible by HMRC for corporation tax purposes. Distributions are therefore taxable as dividend income for the investor.

If the income produced by the property is fixed (such as income produced from a long term repair and maintenance lease) then HMRC declares the interest as tax deductible for the company for corporation tax purposes. Distributions are therefore taxable as interest for the investor.

What if a tenant doesn’t pay their rent?

If rent is not paid then there will be no distribution.

What if the property is untenanted/not leased?

Whilst there is no income there will be no distribution.