Buying property through new subsidiary

Buying property through new subsidiary

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Hi all,

I have a client with a company with lots of cash.  The director/shareholder does not want to create massive personal tax liabilities and would be happy to invest the money.

Could his company which I'll call company A, loan the cash to buy a property to a newly formed subsidiary (company B) and treat it as a company loan?  Company B would basically be a rental business so would receive rents from the tenants and pay the money back to company A who origianlly lent them the money?

I assume the CT thresholds would be shared across the two which is fine.  Are there any issues with this set up?

SEPARATELY

Also if in the future the director/shareholder of company A (who fullly owns company B) wanted to rent the property personally would this create any considerations other than a related party disclosure?

Many thanks!

Steve

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