Hi everyone – I have a small property company that I set up a number of years ago with my sons. They are the major shareholders and are presently non-doms. To get it started I gifted several rented flats (unmortgaged) into it and the rental income goes to the company which is taxed etc. at normal UK corporation tax levels.
I own a small cottage (my primary residence) and I would like to also gift that to the company – really just so that all my assets are in the one place and largely already owned/controlled by my children (just in case!)
My question is if I do that, and live in the cottage without paying rent, will I incur a benefit in kind charge from HMRC? There is no inheritance tax implication as the cottage is well below the threshold of that, it would just be BIK as far as I can tell.
Not trying to avoid any onerous taxes or anything – just trying to make my affairs neat and tidy for the boys well in advance, but equally don’t want to pay a benefit in kind charge on the home I already own mortgage free just by trying to do the right thing for my kids!
Any help appreciated.