Day2Day started this topic @ 15:24 on 16/08/2007
Hi everyone!
I have been running a small business from home for a while and recently decided to become a limited company. As a way of getting "tax free" money out of the company i was going to rent a room to the company. However I have heard that my home could be subject to Capital Gains Tax even though it is my main residence.
Any one got any ideas if this is right?
Please help!!!
RE: Renting a Room to My Own Company
James Smith | 16/08/2007 04:09 PM
This whole area is very technical so you need to take a lot of care getting it right. You can do as you say, but you would need to declare the rental income in your own name, and as you say a portion of your home would be subject to CGT. There are other ways of achieving the same thing with less risk.
I know it sounds rather biased but speak to the accountant who advised you to set up a limited company and they will put you straight on this and all the other issues you probably haven't thought about yet! With ltd co.s its vital to get all the issues resolved upfront rather than retrospectively when it will often cost a lot more money and time to resolve.
Regards,
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James Smith
Chartered Accountant
www.jamesesmith.co.uk
01235 536 773
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Your indispensable guide to Small Business Bookkeeping, Self-Assessment & VAT
