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Can't see much point in putting a holiday let in a company as it's exempt from s.24 and it's treated as a business so can make pension contributions and qualify for reinvestment relief etc.
Have I missed anything?
Do you want to hear about one of the saddest and horrific death story I have read this year and an example of sods law. It’s a holiday home. Not a let.
You should consider accidents can happen and be covered.
mitigate risks and limited liability? Especially with compensation culture.
Coming soon Investorsk8.com
Wisdom - an integration of knowledge, experience, and deep understanding that incorporates tolerance for the uncertainties of life as well as its ups and downs.
Income from furnished holiday lets is liable for standard rate VAT, so if you've got a few and you're close to the threshold on the income, it might be worth hiving it off into a separate company if you have other sole trader business interests that having to register might affect.
Faint heart never won fair holiday let...
the VAT man is wise to that and it is known as disaggregation I believe. They will just add them back together to see if you reach the VAT registration threshold and fine you for tax evasion. I believe that once you hit £85k on rental income on airbnb or other short term lets, you have to register for VAT.
Then you have a problem whether to absorb 20% of your profit to remain competitive with those who are not VAT registered or avoid registering. Or upping your prices by 20% to collect money for the Government and make yourself uncompetitive. I am not an accountant and am happy to be corrected.
I'm not an accountant either, but from a hazy memory of a conversation with mine a couple of years ago, they said that as long as the other business was completely different then it was an acceptable and sensible move. I have holiday lets, but I also make about £10,000 a year providing freelance transcription services to journalists. I don't want to have to start charging 20% on that and if it all stays under sole trader status, then the transcription stuff might get caught up in the VAT net. But I wouldn't try and split out the renovation works (which are considerable) I do on the properties before they become holiday lets into a separate company from the holiday lets themselves.
If I was going in the holiday home world today I would do it via a company
i can never fully understand why s24 did not apply
if you look at govt reasoning s24 is to stop landlords buying because of shortage
holiday homes are normally located. Whet FTB can’t buy although they are from the area
we have seen what govt can do so I would not take a chance buy it via a company
Learn Change and Adapt ?????
All comments are for casual information purposes only. If you wish to rely on any advice I have given please ensure you obtain independent specialist advice from a third party. No liability is accepted for comments made.