Can I buy and company rent from myself?

[beaker]

Aside from the possible bad timing (top of market?), could I buy a flat near my gig, then use the company to rent it from me on a market rent?

Why would you want to do that?

[hugebrain]

so where's the benefit ?

If you mortgage the flat then you can just match the rent to the interest and there's no profit so no tax to pay. If the contract is < 6 months and you have another home then there's no benefit to the employee.

Seems like it should work (IANAA).

[TheFaQQer]

so where's the benefit ?

Business is going to pay someone, so why not it be you? OK, you pay more income tax, but you get more income that otherwise you would be paying to someone else.

You get a guarantee of a tenant for the period of your contract, so as long as the company is paying you market rate, then why not?

Alternative is company rents from third party and pays them money. You rent to fourth party, and receive money from them that you pay tax on. In the middle of this is an estate agency / management firm (sometimes) taking money from you. As an intro to BTL, might not be a bad way to do it.

[Bluebird]

Yes.

so where's the benefit ?

[TheFaQQer]

won't you have to declare the income that you get from rental and therefore pay income tax on it ?

Yes. But if the OP is looking at BTL anyway, then why not do it where he knows there will be a renting tennant (the company) for a few months?

[Bluebird]

won't you have to declare the income that you get from rental and therefore pay income tax on it ?

[Hiram King Of Tyre]

I was looking at the idea of my partner buying a caravan and renting it to the business at market rate. The accountant advises against it though. Something to do with "connected persons"

[TheFaQQer]

And who is going to live in the flat?
If you are living in the flat then you are an employee of the company being provided with accomodation and it will be taxed as a BIK.

If the company is going to rent it from you then it must remain unoccupied or be used as a business and not have anyone living there.


K

I think (from other posts) that the OP is planning on buying somewhere personally, renting it to the company, for an employee to stay there while working away from home, which would be a business expense.

The money paid would need to be declared on a P11D, but relief can then be claimed back so there is a 0 tax bill on it.

[TheFaQQer]

Eh? Company doesn't own flat, I would, as "landlord". The company would then rent on a commercial arrangement from the "landlord", then I as the "renter" would occupy.

I can't see how a BIK arises?

I see no BIK arising from the ownership of the flat. You may need to declare the expenses claimed by an employee staying their and then get relief on your personal tax return, but I can't see there being a BIK here.

IANAA, YMMV etc.

[Keldin]

And who is going to live in the flat?
If you are living in the flat then you are an employee of the company being provided with accomodation and it will be taxed as a BIK.

If the company is going to rent it from you then it must remain unoccupied or be used as a business and not have anyone living there.


K

[johhnysalad]

Your company has no use for a flat. You would have to pay income tax on the benefit-in-kind obtained through occupying the flat.

Eh? Company doesn't own flat, I would, as "landlord". The company would then rent on a commercial arrangement from the "landlord", then I as the "renter" would occupy.

I can't see how a BIK arises?

[dude69]

Aside from the possible bad timing (top of market?), could I buy a flat near my gig, then use the company to rent it from me on a market rent?

Your company has no use for a flat. You would have to pay income tax on the benefit-in-kind obtained through occupying the flat.

[TheFaQQer]

Don't see why not - just make sure you declare your rental income as income, as you would anyway.

[xoggoth]

Could be wrong, may be some obscure rule, but can't think of an obvious reason why not.

If a reasonable amount of rent is paid why does it matter if you or someone else is landlord? If you did overpay and thereby reduced your company profit for tax, the extra rent you pay yourself is taxable anyway surely, so can't see it can be seen as any means of tax avoidance.

[johhnysalad]

Aside from the possible bad timing (top of market?), could I buy a flat near my gig, then use the company to rent it from me on a market rent?