Buying premises through the company or personally?

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poeticjustice

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Hello,

This question was discussed back in 2007 in the following thread but I was wondering if anything has changed since then?

https://www.askaboutmoney.com/threa...ises-through-the-company-or-personally.69955/

I am starting a Ltd company and am buying a premises for it. Should I buy it personally and rent it out to the business or just buy it through the business? Obviously there is no right or wrong answer but all opinions would be very much welcome.
Thanks
 
The answer is the same as back in 2007. Buy it personally and rent it to the company.

Alternatively, pay a tax advisor to look in detail at your personal circumstances to arrive at the same conclusion.

Yet another alternative is to buy it through the company, and then come back here in 20 years and ask how you can assets out of the company without the double tax hit.

Brendan
 
I don't think it is as straight forward if you are buying a property for use in a trade rather than an investment property.

If you have sufficient personal funds then you can purchase the property personally. However, if you have to borrow to acquire the property it is more expensive in the short run to purchase personally.

This is because the capital repayments would have to be funded out of your after tax income. This is potentially 55% income tax. The capital repayments for the company would be after tax of 12.5%.

There may be a double tax charge when you eventually sell the property but you may be able to avail of retirement relief or some other relief.

In general, if you can afford to purchase the property personally then you can do this but if you have to borrow you should do some calculations to see which is the most affordable option.
 
There is no simple answer to this question, and it is a massive question for anyone facing it. All @srase's points are valid. Brendan's principle generally holds for most people but I have seen people ruined by following it when it was patently unsuited to them.

Think long and hard before you decide and get appropriate professional advice unless you have a thorough understanding of all the issues.
 
Yes, I'll be running it by my accountant too but it's not straightforward from what I've read.

I'll be getting a loan to purchase the property. Either a commercial loan in my own name or a loan in the business' name. I need to find out more about the retirement relief that srase mentioned because I don't know enough about this. It was the double tax charge that was putting me off and also the security of owning the property if the business fails.

Thanks for the responses so far.
 
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