resi property - owned by company -mixed use
I would normally shy away from advising a client from owning his home within a company, but rather against the grain, that is what is happening!
The property is a fairly large old building consisting of a three bedroom owners accomodation, plus a part sectioned off and extended and used as a bunkhouse. The lodging part sleeps 26 and brings in approx £60k rents per year. The company also does adventure trail walks so it all fits together reasonably well. (further downside in that vat will need to be accounted for on the £60k).
I advised that there will be a bik on the provision of living accomodation, may i just check my rationale.
The cost of the whole property is £500k. We estimate that the value of the living accomodation is £300k. I am going to assume for the purposes of this that the rateable value is £7k pa.
I calculate that the annual bik using s107:
7,000 + ((300-75)*4%)) = £16,000
Q, are we able to apportion the cost of the property in this way (i.e. 300 out of 500).
Q, he is personally providing £100k of the £500k purchase price by way of loan to the company. are we able to reduce the £100k to reduce the formula in s104? (probably not).
Q, would you suggest that we get this rationale cleared with HMRC in advance of any p11d work.
Q, how on earth do we find the rateable value?
- Shutting down a company with creditors 1,460 31
- Is this fraud? 279 5
- Saying goodbye 403 13
- Now Scotland has voted "No", when does England get to vote? 818 36
- Tax on private fuel for own car 189 5
- Is it possible to retrospectively change the tax year that dividends were paid. 342 16
- Sportman claiming for training kit 991 11
- Flat rate scheme 161 3
- Drop box Storage 188 3
- Private portion of costs and expenses in Accounts 271 13
- Any Scottish members out there? 11,188 413
- Has HMRC got powers to do this? 616 4
- Furnished lettings criteria 117 1
- Is there an expert in Excel out there? 410 5
- SAGE TRANSACTIONS DATA 123 2
- Pension Contributions Relief 364 11
- Recovering VAT on property purchase 113 1
- Tax on interest received from insurance company 204 2
- Unnecessary S9A Enquiries 306 1
- Naming new company 199 4
- Raiders of the Lost Tax File 1,270
- Chartered Accountant in County Down N.Ireland 452
- National Insurance 352
- Non Resident 266
- Cass 5 FCA Client Money Software recomendation 259
- Franchise income and costs 238
- Hands on experience of Digita 193
- Employer's Helpline 144
- Best way to take money from a business if you have unlimited EIS allowances? 138
- employment capital allowances 135