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Where Taxpayers and Advisers Meet

Furnished Apartment

simpsonite
Posts:104
Joined:Wed Jun 24, 2009 11:58 am
Furnished Apartment

Postby simpsonite » Wed May 26, 2021 1:13 pm

Background.

Limited company has purchased an apartment in a seaside village for £350,000. The company is to re-decorate it and furnish it etc. and pay the running costs. The directors are 5 / 6 very close family members (Parents, offspring and husbands) who also own all of the issued shares. They are all higher rate tax payers.

They are considering the best way to proceed in terms of occupancy. Ideally they would like to keep it just for the family to use, but should the tax consequences be horrendous then they may consider renting it out to the wider public / staff as a holiday let. This property has no relationship with the main trade of the company and is around 50 miles away from the main company trading premises.

I contacted the Employers helpline who informed me there is nothing in the guidance (and they double checked with the technical team), so there would be no benefit in kind if the directors had exclusive use of this apartment. This was a shock to me. Anybody have any ideas?

Jholm
Posts:219
Joined:Mon Mar 11, 2019 4:22 pm

Re: Furnished Apartment

Postby Jholm » Wed May 26, 2021 3:24 pm

Sounds very much like an accommodation benefit to me....

pawncob
Posts:4745
Joined:Wed Aug 06, 2008 4:06 pm
Location:West Sussex

Re: Furnished Apartment

Postby pawncob » Wed May 26, 2021 4:35 pm

If it walks like a duck etc
https://www.gov.uk/hmrc-internal-manuals/employment-income-manual/eim21002
With a pinch of salt take what I say, but don't exceed your RDA


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