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Where Taxpayers and Advisers Meet

Rent

lizzie0407
Posts:2
Joined:Mon Sep 26, 2011 12:21 pm
Rent

Postby lizzie0407 » Wed May 23, 2018 1:15 pm

A client company has a 50% shareholder who is providing premises to it free-of-charge.

The premises are used in the trade of the company which is generating annual profits.

The shareholder is a higher-rate taxpayer - so there is a tax benefit with the company only paying CT at 19%.

In my mind, there should be a commercial rent paid/chargeable.

Does anyone agree with me .... or am I missing something?

Many thanks.

pawncob
Posts:5090
Joined:Wed Aug 06, 2008 4:06 pm
Location:West Sussex

Re: Rent

Postby pawncob » Thu May 24, 2018 12:03 pm

How is there a tax benefit? The company's paying tax on a larger profit due to non payment of rent. The shareholder doesn't get any rent, so he's losing out on the net of tax income. 60% of something is better than 100% of nothing.
With a pinch of salt take what I say, but don't exceed your RDA


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