Nice people thread part 6 - thrice by twice as nice :)

chewmylegoff

silvercar wrote: »

You can offset against other rental income, in the UK.

this is right. if the property is held outside of a company, you can either (i) offset the loss against profits on other rental properties [also owned personally rather than owned by a company you own] in the same tax year; or (ii) if no such profit is made, carry forwards the loss to offset the loss against future profits from this property or from other properties in future tax years.

you cannot offset the loss against any other income.

Or you could rent it to one of the other businesses.

if you do this simply to engineer a situation where £310/month of the company's profits are offset against the mortgage on the flat, then the rental payment that the company would not be a tax deductible expense (as the payment is not an expense incurred wholly, exclusively and necessarily in connection with the business carried on by the business).

in fact, it is likely that the correct tax treatment of any such payment which was for the purpose of covering the mortgage would be to account for it as salary (or drawings) paid to CK by the business.

and of course if you retrospectively charge rent to the business for a period in which you were advertising the property to rent on rightmove, that would amount to tax fraud.

of course if the business did have a use for the property - e.g. providing occassional overnight accomodation to staff who have had to work late and couldn't make it home by public transport, then that would be ok - as long as it was really used for that. may be a tax implication for anyone using the property though.

CKhalvashi

silvercar wrote: »

I'm sure there is a tax saving hiding in there.

We're up to 9 BTL properties, so yes there is to an extent. 4 are mine, 4 are hers and this one is joint, so we are splitting the loss 50/50

chewmylegoff

Generali wrote: »

AIUI you can't offset the losses from BTL against other income. A way around it might be possible if self employed as I guess it could be possible to wrap the rent of the property and other self employment into one income and cost stream.

no, it isn't, unless the "other" self employment is renting out other properties. rental income is always treated differently (and the same applies if you transfer into a company, schedule A losses are ringfenced and cannot be offset against profits from other sources).

Get advice though. The Inland Revenue might want to see the property transferred to the company you would be using which might incur SDLT (stamp duty).

if you transfer the property into a company, you cannot take the losses with it, so the £310 x 7 = £2,170 (assuming interest only) losses would be gone (although could still be offset against future rental income on other properties you own outside of a company - although cannot be carried forward indefinitely if you stop carrying on a rental business altogether).

personally, i wouldn't bother trying to do anything fancy. the losses for the 7 month period are £2,170, so max tax saving is going to be £1,085 if he can get it in this tax year before upper rate goes down to 45%. the losses can definitely be offset against future income on this property or others so all you would be achieving if an accountant can do something fancy would be to bring forwards the use of the losses. accountancy fees are likely to wipe out the entire benefit.

that said, CK may have an accountant on tap who won't charge him for a 5 minute chat about this.

the best and easiest way to use the losses is of course to start making profits on this property by getting a tenant in it!

zagubov

CKhalvashi wrote: »

Zag, you're a genius!

I'm a governor on the Sawbo school.



CK

It might be better if your tenant was someone from a different school or company, since as a governor/employer you might find a conflict of interest arises at some point. (e.g if the teacher is in dispute with his employers, etc.).
BTW, if you check previous posts you might find some posters have rented out property already and know more about this (I can't precisely remember who).

PasturesNew

I've done loads of Norfolk ..... as I lived in the East years ago it was where a lot of summer holidays and day trips occurred.

I probably plan to be in Norfolk again later this year too and maybe in Suffolk too visiting long-lost relatives.... or I might give them a miss as they're a bit feral.

lostinrates

GDB2222 wrote: »

You are right, of course. I just feel no affinity with reptiles, and I cannot imagine what people see in them as pets.

I have known some quite funny tortoises and once had a parrot fall in love with me, which was terrible in fact, and very distressing for the parrot when i left where it was living, (in fact, while i was living there, when i went out it went berserk, and if it could see me outside through the windows it behaved dangerously to try and get to me)

But the thing is, i find it quite hard to identify with reptiles, however sweet they are, but i can understand others feel like that about reptiles and juvenile delinquants etc.

chewmylegoff

lostinrates wrote: »

I have known some quite funny tortoises and once had a parrot fall in love with me, which was terrible in fact, and very distressing for the parrot when i left where it was living, (in fact, while i was living there, when i went out it went berserk, and if it could see me outside through the windows it behaved dangerously to try and get to me)

But the thing is, i find it quite hard to identify with reptiles, however sweet they are, but i can understand others feel like that about reptiles and juvenile delinquants etc.

oh used to have a terrapin. i was glad to see it go to be honest, the tank was massive and a right pain to keep clean. i didn't really see the point of it, but she was terribly upset when it died.

zagubov

chewmylegoff wrote: »

oh used to have a terrapin. i was glad to see it go to be honest, the tank was massive and a right pain to keep clean.

Having worked in a path lab I wouldn't go near a reptile. Loads of them are heaving with Salmonellas. :eek:

michaels

LIR - also attractive to birds

lostinrates wrote: »

I have known some quite funny tortoises and once had a parrot fall in love with me, which was terrible in fact, and very distressing for the parrot when i left where it was living, (in fact, while i was living there, when i went out it went berserk, and if it could see me outside through the windows it behaved dangerously to try and get to me)

chewmylegoff

zagubov wrote: »

Having worked in a path lab I wouldn't go near a reptile. Loads of them are heaving with Salmonellas. :eek:

yeah but as long as you boil them for long enough before eating, they're perfectly safe.

:A