Benefit in Kind Tax on company asset occupied by Relative of

by **Micciconicci** on Mon Jan 02, 2012 1:46 pm

My elderly mother was recently looking at the various equity release options currently available on the market, after looking at the various deals available to her .
I decided to purchase her home through the Limited Property Company of which I am a director.
In the Deal the Company paid her 50% of the current value of her Home and in return she stays in her home rent free for the rest of her life. (More or less the same deal as are being offered by the Insurance companies etc on the market)

I have recently been told my mother living in an asset owned by the Company free of rent constitutes a benefit in Kind to myself and would therefore incur tax and national insurance payments from myself. To the value of the current market rent that her home would achieve.
Any comments on this would be greatly appreciated

by **King_Maker** on Tue Jan 03, 2012 5:43 pm

I don't believe the BIK rules will apply to this situation, as it's not actually "rent free".

However, I am not the person who you need to convince, but HMRC. I suggest you contact your Tax Inspector asap to be obtain a written confirmation.