Buy premises via small company or privately?

hi, just wondering which option is better.
Small business, need to move to a new premises. Found premises and trying to decide which is most tax / cost efficient way of buying it. Commercial unit, comprising of workshop/ small factory & office.

Managing director and his wife (also an employee of the company) are in a position to buy the building and lease it back to the company for going market rent. (other 2 directors don't have an issue).

Few questions:
For tax reasons, is it better to buy the premises via the company or for the director personally and lease back to the company.

IF buying privately, the director and his wife, 70% is being financed by them from savings etc, and they are mortgage approved on the remainder, but as the rate offered by the bank is 5.74%, is it better to get a directors loan and pay the interest rate back to the company? There is cash in the company.

Everything would of course be drawn up by solicitors etc.

Advice has been sought but everything was clear as mud after an hour with our accountant! I'll answer any questions.

Should the husband and wife register as a company BEFORE buying in order to claim the VAT back or is this worth doing?

If an hour with your accountant has failed to resolve your query, it's unlikely you will have it clarified here to any great extent, as the answers you seek will depend more on your own and your company's circumstances than on anything else.

The fact that you are even considering a directors loan from the company to its directors is, to me, rather alarming as such loans are almost always illegal and have profound legal and other negative consequences for both companies and directors.

If you have asked your accountant about directors loans and they have failed to tell you this in an hour's discussion, you should seriously question their competence.

You will probably need alternative professional advice before proceeding with a decision.

The option to buy via a company was unfashionable for many years but was always - and remains - worth considering where the investment was heavily mortgaged as repayments could be made from profits after 12.5% tax compared to after circa 50% tax if repaid from rents paid to the directors.

On the other hand, you will need to consider the Capital Gains Tax implications of having the property stuck in a company when the time comes to sell it.

I'm confused by your last question. Does your question relate to a new or existing company? VAT on property is a minefield and if it's relevant to the property you're seeking to buy, you'll need specialist advice from a tax professional with specialist VAT expertise.

Good luck with your purchase.

Thanks for the reply. The 'directors loan' was just an idea. Rather than pay 5.74% to the bank, would it in theory be possible to pay it to the company. The company is existing and has cash on hand.

We were wondering should we set up a company (husband and wife) in order to reclaim the Vat as it is relevant to the purchase.

I will seek alternative advice as this is proving to be a bit of a nightmare! Thanks for your input.

Discussed systematically and at length in other threads.

No need for a new one.

Brendan