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?
- Disbursement of recharge 385 3
- When to tick the estimated figures on ct600 20 1
- FHLs and Entrepreneurs Relief 304 9
- Mortgage Reference 905 16
- Payroll manager and the cloud 307 1
- CIMA CBA or AAT 108 4
- Rental of property in New Zealand 151 1
- VAT joint margin scheme arrangement 132 1
- RTI offline? 616 2
- Can a company claim R&D relief under both the SME and large company schemes? 154 1
- CIS and Xero 278 1
- AMAP on borrowed car?? 257 7
- Retrospective VAT Query 178 2
- property capital gains 412 4
- Chargeable Event - life insurance bond written in trust 153 2
- Client gets a penalty and being threatening! 941 9
- Tips on meals 572 5
- Private doctors - Ltd company vs partnership 1,353 15
- S.455 Tax again 456 9
- Overdrawn directors loans and insolvent winding up 234 3