If a husband and wife trading through a limited company operate their business from their own home, is it reasonable for them to charge the company a rent?
It would be relatively easy to apportion the domestic costs (mortgage interest, council tax, water, light and heat, insurance etc) and then that part of the costs relating to the company's use of the home could be charged by the directors to the company as rent?
It would appear that the rent the company would pay would be wholly and exclusively incurred for the purposes of the trade.
The income received by the directors would only cover their costs and so this would seem to leave no personal income tax liability.
It would be ensured that no part of their home would be used exclusively for company business and so this would seem to get around any CGT issues whereby private residence relief may need to be restricted.
Does all of this seem to be reasonable?
With the reduction in the dividend nil rate band, it would be good to have as many as possible options for the extraction of profits.