Reinvesting the profits

[aaclapham]

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I know most people say reinvest the profits before the taxman gets it all at the end of the financial year, however can this involve buying property?

I would love to be able to buy a small holiday property in spain with the business profits, and then the business would get money back from people renting it out.

Is this allowed?

[Mogga]

Don't see why not.


You'd have to make sure you complied with all laws etc relating to it. and if you stayed there then you've got to declare that I think.

Ask an accountant would be the sensible advice I think.


You've got to look at what's capital and what's tax deductable. And then consider any capital gains you might need to pay etc. in the future

[Barry]

I am pretty sure that you can as long as you can prove that you are not benefiting from it in a personal way.

Perhaps it will work if you only go and visit the property a few times a year for 'maintenance' reasons and rent it out the rest of the time it will not be seen as a 'benefit in kind'

I would be interested in any other answers on this thread.

Ta

Baz

[Darren M]

I know most people say reinvest the profits before the taxman gets it all at the end of the financial year, however can this involve buying property?

You might get tax relief on the property if you can show that it's being rented out, but not much.It's not like you can spend £100k on a property and get £100k knocked off your corp tax bill, mores the pity

[hrbs]

I would love to be able to buy a small holiday property in spain with the business profits, and then the business would get money back from people renting it out.
Is this allowed?

Hi Andrew

Afraid not. The purchase is not a valid deduction for tax purposes.

As a general rule, you will be taxed on rents received less a deduction for interest on a loan to buy the property and some running costs. Any losses can only be carried forward to be used against income from that property and are not available to be offset against other income.

Income from foreign property needs to be disclosed in the Foreign section of your personal tax return irrespective of whether or not it has been brought back into UK.

HMRC have some useful help sheets at
http://www.hmrc.gov.uk/sa/forms/net-08-09.htm


Regards

Keith
http://HRBS.biz

[aaclapham]

Thanks keith, think I will be contacting you in the New Year for your services :tup