Merging my company with other activities

[SteveB]

I currently run an IT contracting Ltd company.
I also own a holiday home that I let out.
As the holiday home is mortgaged and due to the Council tax, fuel and other expenses the letting 'business' actually doesn't realize a profit.
Would it be legal and feasible for my company to rent the house off me for the sum of the council tax, mortgage interest, 10% of house value wear and tear allowance plus any other costs so that there is no personal profit from this element, then for the company to retain the revenue from lettings?
This would have 2 advantages:
- as the letting is currently running at a loss it would reduce the corporation tax burden
- I would be able to reduce the dividend I take from the company, treating the money from the company for the house expenses as separate income but with no tax liability as the nett profit on this activity would be zero.

[eek]

I currently run an IT contracting Ltd company.
I also own a holiday home that I let out.
As the holiday home is mortgaged and due to the Council tax, fuel and other expenses the letting 'business' actually doesn't realize a profit.
Would it be legal and feasible for my company to rent the house off me for the sum of the council tax, mortgage interest, 10% of house value wear and tear allowance plus any other costs so that there is no personal profit from this element, then for the company to retain the revenue from lettings?
This would have 2 advantages:
- as the letting is currently running at a loss it would reduce the corporation tax burden
- I would be able to reduce the dividend I take from the company, treating the money from the company for the house expenses as separate income but with no tax liability as the nett profit on this activity would be zero.

I'll keep it simple - No.

[northernladuk]

I can't believe you even think this is an option...... Wrong on so many levels.

[northernladuk]

SteveB Stwike him, Centuwion in one post? Is that a record even for a troll?

[SteveB]

Eh? Lost me!

[eek]

Eh? Lost me!

I thought No was clear enough

Cojak I know its a professional forum but.....

So I'll spell it out clearly.

You can't do it, its a blooming stupid idea and chances are HMRC will see straight through it and go and find a means of taxing you for thousands due to your stupid idea.

But if that's not clear enough have you got an accountant? What does he say and if you don't have an accountant go and get one because they will either tell you how to do it or laugh. My guess is that they will do the latter but there are some silly / dodgy accountants out there who think they know a lot more than they really do.

Eek in NLUK isn't hard enough sometimes mode.

[northernladuk]

Eek in NLUK isn't hard enough sometimes mode.

To be fair it is such an ill thought out dumb idea I had him down as a troll so, as easy a touch as I am to the trolls, I thought I would pass on this one

You are doing a sterling job though. Make it a bit more personal and it will be perfect.