Have noticed from previous threads of accountants/bookkeepers working from home as Ltd co, that suggestion seems to be that a rental agreement should be in place between Ltd Co and homeowner. Does anyone have a suitable template for this?
I am operating as Ltd Co from converted garage - would a claim for mortgage interest and council tax be based on floor area or value of garage in comparison to house? Quite a big difference I would have thought!
Anna
Related resources
Replies (4)
Please login or register to join the discussion.
Two CG annual Exemptions
Difficult to gauge as don't know whether claim based on floor area or value of garage in comparison to house. Assuming the latter, I can't see any future gain exceeding two CG ann exemptions.
Why CGT not a problem?
If you claim a % of the household costs representing the garage in the accounts as rental expenses, then when you sell the property, potentially that % of the increase in value will be subject to CGT
Used solely for business
Local authority have said that as long as no staff or regular visitations at start and end of day then not classified as business for rates. Insurer aware as additional insurances taken out with same buildings insurer and position explained. No mention made to mortgage lender.
Garage is used solely for business which is husband and wife ltd co, don't see that CG likely to be a problem.
So on what basis would a claim for mortgage interest and council tax be based? Also what about a standard rental agreement?
Not that easy.
Firstly does the house owner have permission from the mortgage provider, insurer and the LA to use the garage as a commercial business. Not if that is in order then the Garage is open to CGT upon subsequent sale as it is not part of your PPR any more, particularly if you claim a proportion of the mortgage interest. Is it going to be be solely used for business ?? Regards Peter