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  • FIRST POST
    • StewyGriffin
    • By StewyGriffin 13th Jun 17, 9:31 AM
    • 1Posts
    • 1Thanks
    StewyGriffin
    Holiday Let Advice
    • #1
    • 13th Jun 17, 9:31 AM
    Holiday Let Advice 13th Jun 17 at 9:31 AM
    I was seeking some advice from those with more accounting intellect than myself.

    Myself and my wife have just bought a property in Cornwall with the intention of renting it out on the holiday rental market. Gross receipts are expected to be in-between 10-15k although this is up in the air as an unknown territory and only the figures from the previous owner. we are giving it a complete revamp. Running costs expected to be 5k per year.

    We bought this not to provide an income for us but as a saver for our kids (aged 10,13) and possible pension for us.

    Does anyone know hat would be the most effective way of running this 'business', limited company or as sole traders? We don't want to draw on any of the profits and want it to go into kids savings after expenses.

    Any advice greatly appreciated.

    SG
Page 1
    • knightstyle
    • By knightstyle 13th Jun 17, 10:01 AM
    • 4,716 Posts
    • 1,752 Thanks
    knightstyle
    • #2
    • 13th Jun 17, 10:01 AM
    • #2
    • 13th Jun 17, 10:01 AM
    A lot depends on your tax status and IMO you need professional advice.
    We had a holiday let and put it in my DWs name as she was not working.
    A good idea for the first year is to let through Hoseasons or someone like that, they may also give advice on setting up the business.
    • Mojisola
    • By Mojisola 13th Jun 17, 10:04 AM
    • 29,236 Posts
    • 74,694 Thanks
    Mojisola
    • #3
    • 13th Jun 17, 10:04 AM
    • #3
    • 13th Jun 17, 10:04 AM
    Myself and my wife have just bought a property in Cornwall with the intention of renting it out on the holiday rental market.

    Does anyone know hat would be the most effective way of running this 'business', limited company or as sole traders?

    We don't want to draw on any of the profits and want it to go into kids savings after expenses.
    Originally posted by StewyGriffin
    Isn't that the kind of research you do before buying a property?
    • Guest101
    • By Guest101 13th Jun 17, 10:07 AM
    • 15,118 Posts
    • 14,796 Thanks
    Guest101
    • #4
    • 13th Jun 17, 10:07 AM
    • #4
    • 13th Jun 17, 10:07 AM
    I was seeking some advice from those with more accounting intellect than myself.

    Myself and my wife have just bought a property in Cornwall with the intention of renting it out on the holiday rental market. Gross receipts are expected to be in-between 10-15k although this is up in the air as an unknown territory and only the figures from the previous owner. we are giving it a complete revamp. Running costs expected to be 5k per year.

    We bought this not to provide an income for us but as a saver for our kids (aged 10,13) and possible pension for us.

    Does anyone know hat would be the most effective way of running this 'business', limited company or as sole traders? We don't want to draw on any of the profits and want it to go into kids savings after expenses.

    Any advice greatly appreciated.

    SG
    Originally posted by StewyGriffin


    Have you included business rates for your local council in your 5k - seems quite low if you have.


    You arent sole traders, as there's two of you, so your a partnership.


    You cant not draw profit - that would be tax evasion. You take the profit, pay the tax, then invest how you wish.


    Running as a ltd business would make the money liquid assets for the bussiness.
    Last edited by Guest101; 13-06-2017 at 10:26 AM.
    • bob bank spanker
    • By bob bank spanker 13th Jun 17, 10:11 AM
    • 533 Posts
    • 1,039 Thanks
    bob bank spanker
    • #5
    • 13th Jun 17, 10:11 AM
    • #5
    • 13th Jun 17, 10:11 AM
    Did you buy with a mortgage?
    • ssparks2003
    • By ssparks2003 13th Jun 17, 10:14 AM
    • 349 Posts
    • 465 Thanks
    ssparks2003
    • #6
    • 13th Jun 17, 10:14 AM
    • #6
    • 13th Jun 17, 10:14 AM
    I would suggest that you invest in some professional advise from an accountant, it will save you money, time and effort in the long run.
    • Thrugelmir
    • By Thrugelmir 13th Jun 17, 10:32 AM
    • 58,449 Posts
    • 51,823 Thanks
    Thrugelmir
    • #7
    • 13th Jun 17, 10:32 AM
    • #7
    • 13th Jun 17, 10:32 AM
    Time to consult an accountant. Different rules apply to furnished holiday letting as well.

    https://www.gov.uk/government/publications/furnished-holiday-lettings-hs253-self-assessment-helpsheet/hs253-furnished-holiday-lettings-2015
    Financial disasters happen when the last person who can remember what went wrong last time has left the building.
    • chucknorris
    • By chucknorris 13th Jun 17, 10:38 AM
    • 9,548 Posts
    • 14,336 Thanks
    chucknorris
    • #8
    • 13th Jun 17, 10:38 AM
    • #8
    • 13th Jun 17, 10:38 AM
    I was seeking some advice from those with more accounting intellect than myself.

    Myself and my wife have just bought a property in Cornwall with the intention of renting it out on the holiday rental market. Gross receipts are expected to be in-between 10-15k although this is up in the air as an unknown territory and only the figures from the previous owner. we are giving it a complete revamp. Running costs expected to be 5k per year.

    We bought this not to provide an income for us but as a saver for our kids (aged 10,13) and possible pension for us.

    Does anyone know hat would be the most effective way of running this 'business', limited company or as sole traders? We don't want to draw on any of the profits and want it to go into kids savings after expenses.

    Any advice greatly appreciated.

    SG
    Originally posted by StewyGriffin
    Don't ignore the fact that you can reduce your tax bill by paying holiday let profits into your pension, the profits are 'relevant income'. But if you already invest up to the annual allowance that will not be any use to you of course.
    Chuck Norris can kill two stones with one bird
    The only time Chuck Norris was wrong was when he thought he had made a mistake
    Chuck Norris puts the "laughter" in "manslaughter".
    After running injuries I now mostly hike, gym classes and weight training (also a bit of cycling and swimming), less impact on my joints.
    • loveka
    • By loveka 25th Jun 17, 11:02 AM
    • 389 Posts
    • 362 Thanks
    loveka
    • #9
    • 25th Jun 17, 11:02 AM
    • #9
    • 25th Jun 17, 11:02 AM
    It's a while since you posted this.

    I too would like to know the answer, as I have bought a holiday let. I am just paying tax through self assessment. (Or will be)

    You will probably get business rate relief, so don't worry about that. You simply contact the Valuations Office and if they classify it formally as a holiday let you then apply for relief from Cornwall Council.
    • 00ec25
    • By 00ec25 25th Jun 17, 12:33 PM
    • 6,373 Posts
    • 5,886 Thanks
    00ec25
    you have put the cart before the horse and will now pay the consequences

    you say you do not want to withdraw the profit. Therefore the only way you should have done it was via a limited company and simply left the profit in the company. But you are too late to do that now as you would need to sell the property to the company, pay any CGT due (unlikely to be large I grant you) and find a way in which the company can raise the money to buy it from you. An accountant can advise on the company stuff, but not help with fund raising.


    instead you are now stuck with running what, in tax terms, is regarded as a trading business which you will operate as a partnership. That is a very important distinction because it is very different to merely having a rental property.

    the link above from Thruglmere to the FHL rules will get you started, but sounds very much like you need to see a professional and get your first year's set of accounts done properly for you, especially as it will need a set of partnership accounts and thus 3 separate tax returns.
    Last edited by 00ec25; 25-06-2017 at 12:35 PM.
    • Crashy Time
    • By Crashy Time 25th Jun 17, 1:14 PM
    • 6,058 Posts
    • 2,345 Thanks
    Crashy Time
    I was seeking some advice from those with more accounting intellect than myself.

    Myself and my wife have just bought a property in Cornwall with the intention of renting it out on the holiday rental market. Gross receipts are expected to be in-between 10-15k although this is up in the air as an unknown territory and only the figures from the previous owner. we are giving it a complete revamp. Running costs expected to be 5k per year.

    We bought this not to provide an income for us but as a saver for our kids (aged 10,13) and possible pension for us.

    Does anyone know hat would be the most effective way of running this 'business', limited company or as sole traders? We don't want to draw on any of the profits and want it to go into kids savings after expenses.

    Any advice greatly appreciated.

    SG
    Originally posted by StewyGriffin

    Sounds way too optimistic IMO.
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