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?
- Which company is best for online new company formation? 12 1
- What is the reasoning behind HMRC letter re high income child benefit charge? 978 16
- Tax return to date of death/R27 76 2
- Gross Profit Percentage 432 10
- Preparing a consolidated TB 267 7
- does a hybrid car with CO2 92g/km bought April 2014 459 5
- How to deal with a prior year CT adjustment 236 8
- Companies House 353 7
- Medical benefit on low paid wife of director? 109 5
- Date of acquisition for capital allowances 120 1
- Can I use the approved mileage rates in a Limited Company? 89 2
- Is there anything I should know about Northern Irish companies? 227 6
- can a CGT transfer be legally cancelled in the future if 250 8
- Self employment trap - pension 432 5
- Awkward IP 700 10
- Prepare for Chaos 491 5
- HMRC Penalties - are they enforceable? 2,727 69
- Buying Microsoft's Surface Pro 3 213 3
- I hate HMRC's voice recognition system - The Inept Interrogator 1,681 29
- Simple Ltd company accounts service 614 14
- CTA study material 610
- Anyone have clients that use Pay4Later to offer customers credit? 374
- Employment related securities question 231
- Foreign Business setting up in UK 204
- ATED Penalties 197
- AIM Stocks and IHT 180
- Tax Relief for overseas employees 141
- Expat pension contributions? 136
- Trust for Employee 130
- Staff accommodation without a rental value or RV 122