I’m looking to buy the property my company trades from. Should I buy it in my own name or should my company buy it? I have the reserves for either.
If you hold the property personally and let it to the company you will be able to extract funds from your company as NIC-free rents. However, when you sell the property, the gain may well be taxed at a higher rate in your hands (up to 28%) than in the company (possibly 20%). You will only get entrepreneurs’ relief on the property if it is sold in association with your withdrawal from the business that involves disposal of some, but not necessarily all, of the company shares. The entrepreneurs’ relief on the gain is reduced where rent for the property has been paid by the company.
If the company holds property this removes the possibility of NIC-free rents. When the company sells the property it will get indexation relief on the value and the net gain may be taxed at a lower tax rate. However, the proceeds will be trapped within the company. Both you and the company could roll over a gain arising on the sale of the property in the future, if it has been used for the purpose of the trade carried out by your personal company. As you can see there is a lot to consider and expert advice in your own situation is important!