Buying property with your Ltd co

[contractor79]

Hi everyone
Is it allowed for you to buy a flat with your Ltd co, then rent it back to yourself and claim all the expenses on the flat as company expenses? Or is that taking the p*** too much?

[contractor79]

the following website seems to suggest it's best not to:-

http://calculator.contractoruk.com/

[ASB]

Yes it is allowed. But there are reasons why it might no be a good idea. This might enlighten you: http://www.taxcafe.co.uk/propertycompany.html

You do some have some other options which you might want to run past your accountants:-

- Have the company rent the property and you use it. Can be BIK implications which may or may not affect you.
- Buy the property yourself and rent it to the company at a market rent (this also effectively puts you back in the position above)
- Buy the property yourself and expense the mortgage interest council tax etc. [I did this for years and it went through investigation OK, albeit with a bit of sabre rattling from HMIT and my advisers]

If it is your only residence then review how you are charge to tax on the benefit if it is a company asset placed at your disposal. It's on HMRC website

[contractor79]

thanks

hmm, so when you pass that 2 years on one site do these things have to stop?

[Alan @ BroomeAffinity]

The company will also have to pay CGT on any disposal proceeds and then you'd need to pay tax on the withdrawal of the profit from the company so I'd not recommend it.

Also, as a side issue, the property could be at risk if anything happens to the company.

[contractor79]

it doesn't seem a great idea after all
think there's something to be said about keeping the ltd co simple