Buying Flat : Private or Company purchase?

[Sertav]

Hi everyone

I'm buying a 2/3 bed's flat by this year's Xmas, as a first-time
buyer. Fictional budget: £100k. The flat will be my sole, long-term
place of residence .

Now, I'm running my own Ltd company, I'm its sole shareholder and I
work from home. Company funds will fund the purchase.

As I see it I have two options:

1 - The company buys the property and it becomes a company asset. I
may or may not decide to pay rent.

2 - I pay myself enough salary + dividends to buy the property.

At least for the foreseeable future, I'd have no intention to sell it,
although one never knows what lies ahead.

If I want to minimise/eliminate my tax liabilities what would be the
best option to pursue?

Thanks.

ST

 

[tim]

Hi everyone

I'm buying a 2/3 bed's flat by this year's Xmas, as a first-time
buyer. Fictional budget: £100k. The flat will be my sole, long-term
place of residence .

Now, I'm running my own Ltd company, I'm its sole shareholder and I
work from home. Company funds will fund the purchase.

As I see it I have two options:

1 - The company buys the property and it becomes a company asset. I
may or may not decide to pay rent.

2 - I pay myself enough salary + dividends to buy the property.

At least for the foreseeable future, I'd have no intention to sell it,
although one never knows what lies ahead.

If I want to minimise/eliminate my tax liabilities what would be the
best option to pursue?

You will get no cgt excemptions if the company buys it (and even if it's
a second property where this is not a consideration the advice is usually
that buying it through the company is too much aggro and not worth it-
though there is a stamp duty loop-hole that a company shell can take
advantage of if you are thinking of transferring it in a hurry ).

tim

 

[Tim]

Now, I'm running my own Ltd company, I'm its sole shareholder and I
work from home. Company funds will fund the purchase.

Do your Memorandum & Articles of Association allow such a transaction? (eg
Objects clause?)

 

[Jonathan Bryce]

Sorry, I'm having another one of those stupid moments.... what's CGT?

Capital Gains Tax

 

[Majordomo]

Capital Gains Tax

Aaah all becomes clear now!! Thanks!