Accommodation expense on a second property actually owned by you

[chrisl]

I understand that you are able to claim an expense for a second property you rent to be specifically near your place of work.

What happens if that second property is one that you already own, a holiday home say, and it just happens to be near your place of work so decide to stay there instead of paying for a hotel.
In this case it is actually a boat on the Thames that allows me to be and work near London whilst my main residence is up north.

From my point of view, what is the point of me paying £80 a night in a hotel when i can stay on the boat, but i suppose from HMRC point of view, the boat is already owned by me so only the normal £4 per week home office costs are available?

Ideally i would rather use the £80 to claim against my mooring costs instead of a hotel but i am assuming i don't have a chance here?

[northernladuk]

As long as it is all above board I don't see a problem...

See what I did there?? above board... aboard... geddit???

As long as you set a reasonable value for rent and don't be daft I don't think then can question it. I personally would be super transparent with this though. It is a transaction between your LTD and you so not an issue but I would get evidence that what you charge is a reasonable rate (particularlt with it being odd accomodation) and write receipts for your LTD. Might be waste of time but rather safe than sorry IMO.

I am assuming you are talking 5 days a week and are not letting out your northern property.

[tractor]

...

I understand that you are able to claim an expense for a second property you rent to be specifically near your place of work.

What happens if that second property is one that you already own, a holiday home say, and it just happens to be near your place of work so decide to stay there instead of paying for a hotel.
In this case it is actually a boat on the Thames that allows me to be and work near London whilst my main residence is up north.

From my point of view, what is the point of me paying £80 a night in a hotel when i can stay on the boat, but i suppose from HMRC point of view, the boat is already owned by me so only the normal £4 per week home office costs are available?

Ideally i would rather use the £80 to claim against my mooring costs instead of a hotel but i am assuming i don't have a chance here?

The tax office would argue that there is no expense. You have already entered into an arrangement to own/lease/rent prior to any arrangement, contracted or otherwise. You, personally could charge your business but any profit you make there is likely to be offset by additional income tax. It is further complicated by whether you have a family in your main home and whether the personal expenses you pay for your second home are secondary or not. You really do have to seek specific, specialist advice for this as it is not as cut and dried as "can I claim for my sandwich". By specialist, I don't necessarily mean tax counsel but certainly an accountant which you may or may not have appointed already.

[tractor]

....

As long as it is all above board I don't see a problem...

See what I did there?? above board... aboard... geddit???

As long as you set a reasonable value for rent and don't be daft I don't think then can question it. I personally would be super transparent with this though. It is a transaction between your LTD and you so not an issue but I would get evidence that what you charge is a reasonable rate (particularlt with it being odd accomodation) and write receipts for your LTD. Might be waste of time but rather safe than sorry IMO.

I am assuming you are talking 5 days a week and are not letting out your northern property.

Were that the case, I don't think any of it would be claimable. IANA. Talk to an accountant.

[northernladuk]

The tax office would argue that there is no expense. You have already entered into an arrangement to own/lease/rent prior to any arrangement, contracted or otherwise. You, personally could charge your business but any profit you make there is likely to be offset by additional income tax. It is further complicated by whether you have a family in your main home and whether the personal expenses you pay for your second home are secondary or not. You really do have to seek specific, specialist advice for this as it is not as cut and dried as "can I claim for my sandwich". By specialist, I don't necessarily mean tax counsel but certainly an accountant which you may or may not have appointed already.

Would they really say there is no expense? This is an agreement between a LTD and the person owning the boat? Technically two different entities. Granted the money from the LTD for rent should be classed as income on a SA return.

Maybe I have read this wrong.

[tractor]

..

Would they really say there is no expense? This is an agreement between a LTD and the person owning the boat? Technically two different entities. Granted the money from the LTD for rent should be classed as income on a SA return.

Maybe I have read this wrong.

No that is absolutely correct, I think I worded it wrong (there's another reason why you shouldn't take financial advice from the internet without corroborating it with professional expertise), moreover, as a property owner the OP can 'let' to a lodger with up to £4k pa tax free (iirc), I think that only covers a room or 'part' of a property and I also think that only covers the main home which, unless you are a politician or union boss you are not allowed to flip.

This area is rather complex when the landlord owns the company that does the renting esp where it is a second home. There are lots of examples on the HMRC site. I suggest the OP has a look there to see if there is a specific example that characterises their proposed arrangement.

[MarillionFan]

I did do this at the end of the 90s.

Basically I was staying in a hotel during the week at a different location. When I received a six month extension I bought a BTL and had the LTD take out the rental agreement which I used to secure the mortgage. As this covered the interest I made no gain on my self assessment. I had reduced by hotel costs and the LTD paid the rent. When the contract finished I rented it out to someone else.

I benefitted on the capital gains a few years later.

[chrisl]

Interesting comments but i think it has backed up what i was thinking.
Possible rent it to myself from my company (rent a room not available as not main home so will have to pay tax on the rent received) or claim nothing.

Yes working 5 days per week and main home is empty.
Thanks for the comments.

[northernladuk]

Interesting comments but i think it has backed up what i was thinking.
Possible rent it to myself from my company (rent a room not available as not main home so will have to pay tax on the rent received) or claim nothing.

Yes working 5 days per week and main home is empty.
Thanks for the comments.

If you are going to declare this you should be able to offset costs against the tax. If it was a house you can offest the interest of the mortgage and also claim 10% against wear and tear of furnishings plus other smaller things such as insurance and so on. I am not sure what you would do long term though so could be worth your while speaking to an accountant.