I have a very small garden behind my (owned) house. My Ltd company currently pays rent in an office building for a small suite (180sqft). About £300 pcm bills etc inc in a City centre location. Thinking of building something (insulated log cabin) in the back garden to take its place. Two ideas: 1) Personally build it, and rent it to LtdCo. I guess the rent becomes taxable income to me personally, and remains a tax deductible expense for the business. In order to have the money to build it I'll have to have paid tax on it (business as profits and personally as dividends), and can't get VAT back on materials. 2) Rent the land with utilities supplied to LtdCo. Avoid any eventual CGT by making the LtdCo remove the structure at end of tenancy (does that work?). Can get VAT reclaimed on whole build. Don't pay dividend tax on the money needed to build it. Can claim capital deductions for additions to the basic structure, such as electrical installations, furniture, insulation, etc. Building is owned by business, for its exclusive use, no BIK. Yet most often I see advice against 2) - so I'm probably missing something? I guess one thing my current arrangements does have in spades is legitimacy - it's pretty clearly all above board and straightforward, whereas 2) could start to raise questions. What are the other drawbacks to 2) I'm missing?