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?
- Have I dropped a major clanger? 1,321 21
- VAT online filing exemptions 265 4
- Has anyone read the implications of the Lisbon treaty? 852 18
- NALS Accountants Report 99 1
- Do I need to report this to SOCA 3,467 35
- Legal title not in the company name 270 10
- Dividend dates 561 10
- simple one...capitalisation of legal fees on purchase of business 125 3
- Sole properietor 169 4
- transitioning payroll 237 8
- dividend proposals 105 2
- How to reclaim VAT that was missed off previous invoices? 232 2
- Deduction from Salary 297 8
- PPR exemption - can it be due on a bigger area than 0.5 hectares? 192 2
- Can I take action against my accountant for incompetence? 2,725 60
- Child Tax Credits - date of cessation of qualifying young person 88 2
- VAT on sales net of CIS suffered 437 10
- ACCA Cert/Dip in IFRS 158 2
- 12 Pay Problems 255 3
- Mutual trading organisation has chargeable gain 89 1
- Property exchange - 8-year legal delay following fall-out 624
- Cancelled 363
- SAGE Payroll Data for Import to MS Dynamics AX 342
- Cancelled 311
- Have you staged yet for auto enrolment? 283
- Probiz 271
- Free-standing washing machine - unfurnished lettings 231
- VAT on non-profit making clubs (ECJ VS West Dorset Golf Club) 230
- Phishing emails purporting to be from CIPFA? 202
- Is this UK incapacity benefit taxable in UK or Jersey? 176