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Purchasing / Leasing a Beach Hut

Is it better to buy the hut via a LTD company or personally?

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I am looking to purchase/lease a Beach Hut with the view to use occassionally for pleasure, but also to rent out to cover costs and put the excess towards a university fund for my children. 

The price is £50,000 (up-front) for a 20 year term, at which point, I will hand back the keys (and may receieve a small token amount in return). It is similar to a caravan purchase. I have put down a £5,000 deposit from personal savings already. 

I'm looking for a few bits of advice. 

Do you think the transaction be subject to stamp duty? We own a BTL already. 

We are both higher rate tax payers, so we think it would be better to set up a LTD company for the lettings and run it like a proper business. Presumably that will be more tax efficent. But we may be purchasing before we can set up a LTD, and in any case, the funds are personal - so is that allowed? Or do we need to make sure the hut is sold/leased in our company name?

 

Replies (11)

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By The Dullard
16th Jun 2021 21:22

No stamp duty on this transaction, but then ½% of £50K is only £250 anyway.

Thanks (1)
Maytuna
By DJKL
16th Jun 2021 22:11

Consider benefit in kind issues if available for your use from your company.

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By Paul Crowley
17th Jun 2021 08:56

Talk to an accountant before the decision is made
Understand the Benefit in kind issue.
What tax do you expect to pay both in the company and on the dividends and on the benefit

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ALISK
By atleastisoundknowledgable...
17th Jun 2021 09:02

It only takes a day to set-up a company, no problem with funds coming from you. The other points will be very circumstance dependant and you should take advice from an actual person that you explain everything to.

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By Tax Dragon
17th Jun 2021 09:28

If it makes enough of a difference to worry about, then it makes enough of a difference to take advice about.

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Replying to Tax Dragon:
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By Hugo Fair
17th Jun 2021 11:06

I like it ... a new strapline for Any Answers!

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Replying to Hugo Fair:
Maytuna
By DJKL
17th Jun 2021 12:40

Agreed- excellent strapline. Maybe just needs another line following it, something like, "Because you are worth it" or "Because your tax issue is our tax issue"

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By Duggimon
17th Jun 2021 14:54

Have you considered setting up the beach hut as the trading subsidiary of an offshore holding company?

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Replying to Duggimon:
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By Mr_awol
17th Jun 2021 15:12

No No No.

The UK subsidiary should be a corporate member of an LLP that leases the hut from a CIO.

Thanks (1)
Replying to Mr_awol:
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By Hugo Fair
17th Jun 2021 16:00

And you could promote it all with the Jimi Hendrix Experience track:
"And so castles made of sand
Slips into the sea eventually"

https://www.youtube.com/watch?v=XJ035W-2p6M

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