Buying a 1 bed flat outside europe as a "branch" office

[conejo1979]

Hi Gents! I am new to LTD co. so I got a critical question. (my English is not perfect)


I just got my first contract as a consultor “project engineering services” (oil and gas) I will be paying myself £500 per month on salary (plus expenses). I don’t want any more income, so I am planning to increase the value of the company, leaving all the money inside the LTD, until I reach £25k inside the company.
My idea is to use that money to “invest” on a 1 bed flat in Chile (I am Chilean btw) (I already privately own one in chile that gives me £200 per month) so:
Will it be better to buy the flat as limited co investment or get the money as a dividend and buy the flat privately?

I understand that my company trade is not “properties”, so:
1-Can be this flat (in chile) be classified as a branch/office? Of my consultancy company (for services, or potential engineering services abroad)
2-If yes, due to the fact that my company has an “asset” (it worth more from the bank point of view) will the bank lend the company £25k so I can buy another flat?

Or
Will it be more convenient to re class the company as a “property investor” and declare the rent from chile (£200 month per flat)?? So, the bank, also will see its profiting, meaning more lending for more flats?


Many thanks

[conejo1979]

2/10

Worst troll effort for a long time.

Why are you saying that? Because I am new?
Do you normally insult people without even know them?

[Greg@CapitalCity]

Will it be better to buy the flat as limited co investment or get the money as a dividend and buy the flat privately?

The latter.

[northernladuk]

I just got my first contract as a consultor “project engineering services” (oil and gas) I will be paying myself £500 per month on salary (plus expenses). I don’t want any more income, so I am planning to increase the value of the company, leaving all the money inside the LTD, until I reach £25k inside the company.

That should take you all fo 3 months.

My idea is to use that money to “invest” on a 1 bed flat in Chile (I am Chilean btw) (I already privately own one in chile that gives me £200 per month) so:
Will it be better to buy the flat as limited co investment or get the money as a dividend and buy the flat privately?

Don't use company money for a whole host of reasons. Dividend yourself and do it privately..

I understand that my company trade is not “properties”, so:
1-Can be this flat (in chile) be classified as a branch/office? Of my consultancy company (for services, or potential engineering services abroad)

No. To claim so would be fraud

2-If yes, due to the fact that my company has an “asset” (it worth more from the bank point of view) will the bank lend the company £25k so I can buy another flat?

No. You won't have an asset because it is a very bad idea to do this. Again more reasons than I can be bothered to post but very bad all in all.

Will it be more convenient to re class the company as a “property investor” and declare the rent from chile (£200 month per flat)?? So, the bank, also will see its profiting, meaning more lending for more flats?

No. Just run you company properly, keep your nose clean and re-invest your personal money properly. Doing anything that you mention is going to get you in trouble with HMRC and eventually the law.

There... I fed the troll

[Wanderer]

Will it be better to buy the flat as limited co investment or get the money as a dividend and buy the flat privately?

I agree with Greg@CapitalCity, take the money as a dividend is the simplest option. Your company will pay 20% tax, but there is no further tax for you to pay if you earn less than about £43,000 over the year.

Also give yourself a pay increase to £589/month to make sure you take the full salary of £7068 for the year to 5th April 2012 because this amount is tax free. If you don't pay the full amount of salary then it will become company profit which your company will pay 20% tax on.

It's worth getting formal advice from an accountant - the advice they give you may save you a lot more than they cost they they will help you avoid getting fined for running your company the wrong way or paying too much tax.

[conejo1979]

^^Thanks for the replies, I did speak with my accountant (from the agency) regarding the “business model” but, his
reply wasn’t that solid, hence double check on this forum.

Basically the impression I got from him was that he was only “copy and paste” business plans from previous clients, anyway thanks again!

[TheFaQQer]

^^Thanks for the replies, I did speak with my accountant (from the agency) regarding the “business model” but, his reply wasn’t that solid, hence double check on this forum.

Basically the impression I got from him was that he was only “copy and paste” business plans from previous clients, anyway thanks again!

Sounds to me like you need to get a new accountant.

Any accountant that recommends that you check CUK first, rather than providing an answer, isn't one I'd be trusting too much!!!

[conejo1979]

^^Well, To be fair, He didn’t recommend CUK, It was my Idea to double check. Although he insists to pay myself national minimum wages, instead of ~589/month (the contract is for only 45k)

[TheFaQQer]

^^Well, To be fair, He didn’t recommend CUK, It was my Idea to double check. Although he insists to pay myself national minimum wages, instead of ~589/month (the contract is for only 45k)

Your accountant should advise - if you want to operate your business in a particular way (assuming it's not illegal) then they should help you do that.

I'd be changing if it were me.

[Jeremiah@RHJAccountants]

Your accountant should advise - if you want to operate your business in a particular way (assuming it's not illegal) then they should help you do that.

I'd be changing if it were me.

WHS