Potential buyer of hotel is looking to live there to manage business for a period of up to two years once he is in a position that he is happy with how business is performing.
The purchase is the property/goodwill/F&F. Normally, the most suitable vehicle for purchase in this instance would be Ltd Co but I assume the living there part would cause a BIK issue?
In which case the best option would be to purchase property in personal name, receive rent from comapny and purchase F & F and goodwill within company and thus trading profits are taxed within Ltd co.
Are there any other options here?
Purchaser would be sole Director/Shareholder in company and has no other income.
Replies (6)
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Hmm ... I have no experience in this area so take this with as big a pinch of salt as you wish, but I would've thought that he would need to be on the premises to run the hotel.
On the other hand, what is the value of a few rooms in a building ? I wouldn't've thought it was huge.
Does he want the company to own the property or would he rather own it personally ? It's a factor in deciding what argument to promote.
They are not concerned either way, they just want it to be the most tax efficient way. The cleaner would be prop and business held in a company but I don't want any BIK issues.
Then it looks like you'll need to calculate the BIK and get the director to pay that to the company as rent for his bit.
I would have thought personal ownership and rented to a hotel running company would win from a CGT and commercial POV.
There might be job related accommodation exemptions, but I guess it would be a "it depends"
Agree with this - split the title and ownership from the operations, in case the operations run into trouble and suck up any BIK