Originally posted by teapot418
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Reply to: Charging rent to my limited company
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Previously on "Charging rent to my limited company"
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Originally posted by BoredBloke View PostCouldn't you just set up a BTL company. Then the contracting company rents the property from the BTL company.
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Originally posted by Emma Power Mortgages View PostThere is a lot of red tape around what you are looking to do. This would not fit a standard buy to let mortgage, the property could be bought by your limited company but would still have its limits, its more a second residence by the sounds of things. I would suggest a specialist broker to discuss the situation fully. Upfront advice is generally free and can at least point you in the right direction even if you choose not to proceed with the purchase
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Originally posted by Smokebill View PostHi,
I will be starting a contract in London and I live too far away to commute on a daily basis. I am considering buying a flat. This would not be my main residence or where the business is registered. Would I be able to rent the flat to my limited company as it will be used as business based accommodation? If I am allowed to do this, would this require a specific buy to let mortgage?
Thanks in advance
There is a lot of red tape around what you are looking to do. This would not fit a standard buy to let mortgage, the property could be bought by your limited company but would still have its limits, its more a second residence by the sounds of things. I would suggest a specialist broker to discuss the situation fully. Upfront advice is generally free and can at least point you in the right direction even if you choose not to proceed with the purchase
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Originally posted by Smokebill View PostI have come across a company that will allow me to put the mortgage in the limited company name.
edit: i.e if the mortgage is in the company name then it is their mortgage (at whatever rates etc are available). An exisiting lender could potentially agree to transit the product of course. But it is in their gift.Last edited by ASB; 20 January 2016, 19:32.
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Id thought about doing this. Not least because if your paying £1300 or so a month in rent that's £15k your business is handing over to another person for the privilege of using their flat. So if your company owns the flat, yes you'll ultimately pay CGT on the sale of the flat but it's got to be be better than handing 15k a year to another person. So your 15k a year pays off the mortgage and your business ends up with a very expensive asset.
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Originally posted by Smokebill View PostI have come across a company that will allow me to put the mortgage in the limited company name. This gets around the problem of having to charge expenses back to the company and also would mean I could continue to deduct mortgage interest and other expenses when renting the property. Interest rates are in line with residential mortgage deals.
Anyone have any experience of this?
However, if the company is regarded as owning the property, wouldn't any profit made if/when the property is sold be taxable as a company profit?
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Originally posted by Smokebill View PostThanks ASB - this seems a sensible approach.
Anyone have any experience of this?
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Originally posted by ASB View PostWhat I did (and yes it passed investigation) was:-
- Bought house
- Expensed equivalent to Mortgage Interest, Council Tax, Utility Bills
- Charged £10 overnights
- Declared £500/annum BIK for private use. Family came up a few times
No declaration of personal SATR.
HMIT was OK, both from company and personal perspective.
Should he have been? Not sure, the argument I used was it was cheapest most cost effective way. But with reflection I should probably have been declaring income equivalent to Council Tax and Utility Bills. Interest was of course chargeable.
I suspect the answer may be different if investigated now.
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Originally posted by TheCyclingProgrammer View PostASB - did you buy through YourCo? Assuming you did due to BIK charge.
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ASB - did you buy through YourCo? Assuming you did due to BIK charge.
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What I did (and yes it passed investigation) was:-
- Bought house
- Expensed equivalent to Mortgage Interest, Council Tax, Utility Bills
- Charged £10 overnights
- Declared £500/annum BIK for private use. Family came up a few times
No declaration of personal SATR.
HMIT was OK, both from company and personal perspective.
Should he have been? Not sure, the argument I used was it was cheapest most cost effective way. But with reflection I should probably have been declaring income equivalent to Council Tax and Utility Bills. Interest was of course chargeable.
I suspect the answer may be different if investigated now.
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Big changes to BTLs coming up with no mortgage interest and wear and tear not allowed. Needs looking at carefully to work that out.
Bit that aside OPs question is so basic he's going to understand a lot more about contractor expenses in general before going down this route.
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