commercial property

[Triotrex]

If you buy a commercial property for use for business via limited company . Can I use for example the money to
Buy the building for example 70k deposit mortgage for a 300k property as a expense to reduce corporate tax ? Bit confused as how do these big corporate companies buy their buildings without deducting cost of buying the building Im sure the director doesn’t pay out his own pockets!?

 

[KM-Tiger]

You may well be better to buy the building personally and lease it to the Ltd Co. In the event of insolvency you still own the building.

Take advice from your accountant.

 

[Gordon - Commercial Finance]

As @KM-Tiger says your accountant will be best placed to present you with the best solution for your particular business.

 

[MikeJ]

Our pension fund owns our building. The rent we pay tops up the pension, and isn't counted in the maximum limit for pension payments.

 

[pentel]

The deposit does not reduce the corporation tax bill, neither does the capital part of the mortgage repayments.

There are advantages and disadvantages for whichever way you go about purchasing the building, it is up to you to evaluate these taking into account your own and the companies circumstances.

As well as the options above you could consider forming a holding company to buy the building and hold the shares in the trading company.

 

[Jeremiah@RHJ Accountants]

I would advise speaking to your accountant who will know your business better than us.

A holding company could be an option.

Only the interest payments would be tax deductible.

If you are looking to reduce corporation tax, have your thought about company pension contributions?

 

[Scalloway]

The OP has already had extensive advice here

https://www.ukbusinessforums.co.uk/...-company-then-transferring-personally.390706/

 

[Triotrex]

I would advise speaking to your accountant who will know your business better than us.

A holding company could be an option.

Only the interest payments would be tax deductible.

If you are looking to reduce corporation tax, have your thought about company pension contributions?

What’s the Advantages of Holding company ? Also what do you mean by pension contributions?

 

[Triotrex]

The deposit does not reduce the corporation tax bill, neither does the capital part of the mortgage repayments.

There are advantages and disadvantages for whichever way you go about purchasing the building, it is up to you to evaluate these taking into account your own and the companies circumstances.

As well as the options above you could consider forming a holding company to buy the building and hold the shares in the trading company.

Ok. Don’t you think it should be as the building is solely being used for the business ??

 

[pentel]

Holding company owns shares n trading company. Buys property and rents it to trading company. Rent is tax deductible in trading company but profit is taxable in holding company. Property can be protected should trading company go bust. Holding company can also hold plant and equipment and rent to trading company.

The rules are the rules, it doesn't matter what we think we have to work within them.

 

[Scalloway]

Also what do you mean by pension contributions?

Corporate tax relief for pension contributions

https://www.pruadviser.co.uk/knowledge-literature/knowledge-library/tax-relief-employer/#section-2

 

[Pish_Pash]

Our pension fund owns our building. The rent we pay tops up the pension, and isn't counted in the maximum limit for pension payments.

I think this is the way to go wrt commercial property - to the OP....google "Pensions Small Self Administered Scheme" (SSAS)

 

[james_77]

I am really glad Triotrex asked this question as I had no idea about SSAS.

I too am wanting to obtain a commercial property, and have a few questions I wanted to ask. I wont hijack this post, but on the topic of SSAS:

I did take a quick read of a few articles, can the scheme only contain one person person? In my case, I am a Ltd company, (effectively a contractor) with only myself working for the company?

Would I be able to transfer my existing personal SIPP to the scheme?

Any good articles or wisdom about SSAS any one wants to share? Thanks

 

[Pish_Pash]

I am really glad Triotrex asked this question as I had no idea about SSAS.

You'll also be really glad I replied then ;-)

 

[Dario.c]

I am really glad Triotrex asked this question as I had no idea about SSAS.

I too am wanting to obtain a commercial property, and have a few questions I wanted to ask. I wont hijack this post, but on the topic of SSAS:

I did take a quick read of a few articles, can the scheme only contain one person person? In my case, I am a Ltd company, (effectively a contractor) with only myself working for the company?

Would I be able to transfer my existing personal SIPP to the scheme?

Any good articles or wisdom about SSAS any one wants to share? Thanks

I'm really keen on this as well as I'm in the same situation as James. Any good tip?

 

[Jeremiah@RHJ Accountants]

Looks like others have already answered regarding this.

My best advise would be for each person to speak to their respective accountants as they will know theirs businesses in terms of turnover, profit, cashlfow etc.

Plus speak to an IFA regarding the pensions too.

You can make a transfer but if that is a good idea depends on your circumstances.