Setting up a company to run a holiday let and house let

crocus · 12 January 2018 at 4:43PM

Hello. Hope I'm posting in the right place, apologies if not.
My husband and I own a house that we let long term and are setting up another house to run as a holiday let. I undertake the vast majority of the work (obviously it is minimal with the long term let compared to the holiday let) and this is currently my main job other than some small self-employment work. He is a higher rate tax payer.
We would therefore like to create a set-up where the income/profit for the houses is assigned to me as my work income. I don't especially want to set up a limited company.
Any advice welcome. Thank you.

Pennywise · 12 January 2018 at 5:02PM

Re the holiday let, you can apportion the profits between you in proportion to the work done, so if you do most of the work, you can be taxed on most of the profit.

That's different to a normal residential buy to let, where the profit share must match the ownership share, i.e. normally 50:50. The way to avoid that is to change the ownership, to, say, 75:25, so that you get taxed on 75% of the income. But, you'd need to change the ownership legally which will cost a bit and may have other implications, such as the mortgage company may object and it may not be the right thing to do as regards potentially split up/divorce or death, so it's not something to do without proper advice.

Setting up a company to run a holiday let and house let

Comments

Categories

Get our FREE Weekly email full of deals & guides - and it’s spam-free