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Buying portion of my main residence as office space

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    Buying portion of my main residence as office space

    I'm not sure if this has been discussed before...

    As I work from home, is it possible for my LTD co to buy a portion of the house as office space? I do not intend on taking out a mortgage under the Ltd co but by using the company profits.

    I just want to know...

    a) is it possible?
    b) pros and cons

    Thanks.

    #2
    It has. Don't do it.
    'CUK forum personality of 2011 - Winner - Yes really!!!!

    Comment


      #3
      What you do is rent it out to your company, otherwise it gets very complicated, with problems such as CGT which you would pay if you ever wound up the company.

      Speak to your accountant.
      I'm alright Jack

      Comment


        #4
        Terrible idea, which should become very apparent if you even spent 10 minutes thinking about it.

        Do one of the following three things, whichever works out best for you in terms of expenses recouped/the amount of paperwork and hassle you can be bothered with:

        1) Claim £4/week or £18/month use of home from YourCo, no questions asked,
        2) Calculate the *additional* cost you incur by working from home using some reasonable method and claim that or,
        3) Calculate what you could reasonably reclaim in rental income expenses by renting a proportion of your home to YourCo during office hours, draw up a rental agreement with YourCo for that amount and charge YourCo rent, but you'll need to declare it on your tax return as rental income and reclaim the appropriate level of expenses to make it tax neutral and also speak to your accountant about the potential cons of doing this (it has to really be worth it).

        Comment


          #5
          Just out of interest. OP, what are the benefits you were thinking you might gain from doing this? You must have had some thought in your mind to propose the idea.
          'CUK forum personality of 2011 - Winner - Yes really!!!!

          Comment


            #6
            Pros: nothing
            Cons: everything

            HTH.

            Comment


              #7
              Originally posted by TheCyclingProgrammer View Post
              1) Claim £4/week or £18/month use of home from YourCo, no questions asked
              Go with this one. If you're at a point where the other options really make a difference, you should either focus your efforts elsewhere or your calculation is seriously wrong.

              I WFH 100% and there's really nothing significant to be gained from playing silly buggers with use of home as office.

              Comment


                #8
                Agree with everything the other posters said!

                Comment


                  #9
                  Originally posted by TheCyclingProgrammer View Post
                  Terrible idea, which should become very apparent if you even spent 10 minutes thinking about it.

                  Do one of the following three things, whichever works out best for you in terms of expenses recouped/the amount of paperwork and hassle you can be bothered with:

                  1) Claim £4/week or £18/month use of home from YourCo, no questions asked,
                  2) Calculate the *additional* cost you incur by working from home using some reasonable method and claim that or,
                  3) Calculate what you could reasonably reclaim in rental income expenses by renting a proportion of your home to YourCo during office hours, draw up a rental agreement with YourCo for that amount and charge YourCo rent, but you'll need to declare it on your tax return as rental income and reclaim the appropriate level of expenses to make it tax neutral and also speak to your accountant about the potential cons of doing this (it has to really be worth it).
                  I'd add as a variation on #3 that it doesn't have to be tax neutral. You have to report the rent, and you'll want to reclaim the appropriate level of expenses. But you can pay rent greater than the expenses as long as you report it on your SA, and in some cases it may be worth doing so. It will depend on your particular circumstances. In any event the rent should never be higher than what you would pay for comparable office space in your area.

                  Comment


                    #10
                    Originally posted by WordIsBond View Post
                    I'd add as a variation on #3 that it doesn't have to be tax neutral. You have to report the rent, and you'll want to reclaim the appropriate level of expenses. But you can pay rent greater than the expenses as long as you report it on your SA, and in some cases it may be worth doing so. It will depend on your particular circumstances. In any event the rent should never be higher than what you would pay for comparable office space in your area.
                    Can you even legally use residential property as office space? Home office is one thing, but the moment a Company starts paying rent to allow it's employees to use the property as office different rules would apply.

                    Comment

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