Business Loan to modify my home for my business

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My limited company is looking to get a business loan in the range of 20-30k.

The loan is needed to modify the converted garage in my home to make it suitable for my speech therapy business.

I am looking for a 5-8 year term and am wondering two things:
- which bank would be best?
- should I be looking for a fixed or variable interest rate?

Thank you
 
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I am not a tax expert, but it strikes me as messy spending money from your limited company on your own home.

Clearly, acquiring furniture or fittings for your business would be perfectly legitimate. Likewise decorating it would be legitimate.

But if you are putting in new windows or doors which will form part of the house, who owns them? The limited company or you personally?

What is the advantage of doing it through your company as distinct from paying for it yourself?

I presume you will be able to write off some of the cost for tax purposes.

I think you should list out the costs.

Pay for the structural stuff yourself.
Let the company pay for the non-structural stuff.

Brendan
 
The structural stuff is best funded by topping up your mortgage.
The interest rate will be a lot lower than unsecured personal loan or a business loan.
While the term might match the remaining term on your home loan e.g. 20 years, there is nothing to stop you paying it off over 8 years.


If there is no scope to top up your mortgage, you could ask the Credit Union.
 
If the business pays for any capital works as opposed to fixtures and fittings then firstly the capital is not deductible as business expense. By capital I mean permanent change. Second the business now owns part of the property and there will be CGT on future disposal. Keep the business part to fixtures and fittings..
 
WizardDr said:
If the business pays for any capital works as opposed to fixtures and fittings then firstly the capital is not deductible as business expense. By capital I mean permanent change. Second the business now owns part of the property and there will be CGT on future disposal. Keep the business part to fixtures and fittings..
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I'm pretty certain this isn't true but I'm not a lawyer.


There are definitely difficult tax and company law issues here and the OP should do nothing without first obtaining quality professional advice.
 
On the basis that it is altering the property it changes the split fir CGT purposes and isn't allowed for CT or IT purposes. Check it out yourself. Just think it through logically.
 
WizardDr said:
it changes the split fir CGT purposes and isn't allowed for CT or IT purposes.
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Hi Dr.

Can you explain why it's not allowed for CT or IT purposes?

It would seem to be expenditure incurred wholly, necessarily and exclusively for the business.

I don't think it's a good idea and if it's clearly not going to be tax deductible, then it would be pointless doing it through the company.

Brendan
 
Brendan Burgess said:
Hi Dr.

Can you explain why it's not allowed for CT or IT purposes?

It would seem to be expenditure incurred wholly, necessarily and exclusively for the business.

I don't think it's a good idea and if it's clearly not going to be tax deductible, then it would be pointless doing it through the company.

Brendan
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I expect WizardDr is talking about the distinction between capital vs. revenue expenditure in the first instance (with only revenue expenditure that meets the "wholly and exclusively" test qualifying for a deduction), and noting that capital expense on anything other than things qualifying as "plant and machinery" do not attract capital allowances.
 
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