Business Property

[howletts]

Hi

Any thoughts would be greatly appreciated. Just looking for second opinion.

Ltd company client looking to purchase business premises. Keen to keep out of main company as potential sale of company in foreseeable future. Should property be purchased privately by Directors and rented by company? Or purchased by a newly formed company and rented back? Issues presumably directors ability to finance / tax on rental income (CT v personal tax), CGT on eventual sale of property.

Thanks in advance

[LozaACCS]

Have you considered using a pension scheme, either a SIPP or preferably a SSAS.
The existing company could make tax deductible contributions to the pension scheme on behalf of the directors, this then generates liquidity into the pension scheme.
To the extent that contributions would exceed the wholly and exclusively rule, then the excess could be made as loans to the pension scheme.
The pension scheme then buys the property and rents it to the company or a SPV if required, the rental income is exempt in the pension scheme but tax deductible in the company.

[howletts]

Directors not keen on property in pension scheme?
Any second opinions?

Thank you

[howletts]

Just a bit more background.

Directors medium term view is that main company will be sold so not keen for property to be within main company.
Thoughts are to either purchase via another company or personally. Or is there any other option?
My worries are entrepreneur relief (available if company shares sold/property in main company). Presumably none available if shares of new company sold (non trading?)
Double tax (CGT if property sold in new company + extracting profit)
If held personally, higher rate tax due on rental income received from main company. Does rent have to be at commercial rate?

Any second opinions greatly appreciated.

Thank you