Personal or Business purchase ?

[Archangel]

SIPP. Eventually tax free. Doesn’t count towards inheritance tax. No brainier.

[DoctorStrangelove]

More importantly, do you sell sleds?

Just askin' like.

[d000hg]

Not sure how things work darn sarf, but smaller business premises, especially out of the way areas, get 100% rates relief (based on rateable value). Rateable values also don't change with rent changes, unless an owner/developer or someone applies to have a rates re-evaluation done.

If i personally buy the shop (no borrowings) and rent it to My Co Ltd at the current 'fair market' rent I'll be quite happy with that and I'll get something on the other end when I sell the whole thing to some retired couple who sell their 1 bed flat in London for £2M and want a lifestyle business on a Scottish Island :-) That seems to be happening a lot right now where I live and the surrounding areas in Argyll.

Without knowing any details about your shop or location it's hard to know. We built our own premises so were asked what the rateable value WAS, I think!
But the general consensus we got asking around was to do what aligns best with the reality of the situation rather than set up some convoluted arrangement to save a bit of tax. I assume based on what you've said the rent isn't that much anyway.

I had missed you'd got a shop - what is it? Interesting thing to do.

[TestMangler]

Paying yourself rent is not hugely advantageous. Be aware that your business rates might go up if you put the rent up!

Not sure how things work darn sarf, but smaller business premises, especially out of the way areas, get 100% rates relief (based on rateable value). Rateable values also don't change with rent changes, unless an owner/developer or someone applies to have a rates re-evaluation done.

If i personally buy the shop (no borrowings) and rent it to My Co Ltd at the current 'fair market' rent I'll be quite happy with that and I'll get something on the other end when I sell the whole thing to some retired couple who sell their 1 bed flat in London for £2M and want a lifestyle business on a Scottish Island :-) That seems to be happening a lot right now where I live and the surrounding areas in Argyll.

[eek]

Paying yourself rent is not hugely advantageous. Be aware that your business rates might go up if you put the rent up!

Will check that with the VOA on Monday when Eek jr 1 is back from her weekend away.

[d000hg]

Surely buy it personally then get the rent reassessed by a suitable expert and your business pays a higher rent? As its commercial do you pay tax on the income? Easier way to get the money out of the company and pay off the mortgage.

Paying yourself rent is not hugely advantageous. Be aware that your business rates might go up if you put the rent up!

[eek]

Other option is into your sipp so you don’t end up paying any tax on the rent

[vetran]

Kinda makes sense I suppose.

Logistically, it's easier just to buy the place personally and carry on paying the same rent (but to myself) as I do now. That's the solution with the fewest keystrokes at least.

Surely buy it personally then get the rent reassessed by a suitable expert and your business pays a higher rent? As its commercial do you pay tax on the income? Easier way to get the money out of the company and pay off the mortgage.

[TestMangler]

We went round the houses on a similar topic and it basically ended up: do whatever is most convenient/logical. Neither option stood out as especially compelling.

Kinda makes sense I suppose.

Logistically, it's easier just to buy the place personally and carry on paying the same rent (but to myself) as I do now. That's the solution with the fewest keystrokes at least.

[d000hg]

We went round the houses on a similar topic and it basically ended up: do whatever is most convenient/logical. Neither option stood out as especially compelling.

[vwdan]

I think the tax position would mostly come out when it comes to disposal, wouldn't it? i.e., what are you longer term plans for the property and business, and do you expect the premises to appreciate much in value in that time?

[BR14]

forget your accountant, - ask NowPermOutsideUK.
he pays no tax anywhere on his $multimillion empire.

[TestMangler]

Before NLUK says it.........yes, i know, I will on Monday.....

Right, so, since packing in contracting, i've had a couple of shops, run via a Ltd, both in leased premises.

Owner of one of the premises has died and has no family, and the executor of her will his offered me the place at what can only be described as a bargain price.

Ltd can't afford to buy the place without small borrowings, but I can personally, so, what's the best way to do it ?

a) Lend to LTD and take payment back over time.

b) Buy personally and rent back to Ltd for 'std market rent'.

Technically, makes no odds to me, but what is the most efficient tax wise ?