Holiday let through business?
Discussion
Hello,
Wondering whether anybody has experience running a holiday let through a Ltd company?
In spare time I 'operate' a family company which owns and collects rent from a small office complex. Without any need to take capital from the business, it has accumulated significant cash reserves. Whilst my generation are unlikely to need additional support from the company, I do want to keep growing the company for the benefit of future generations.
Whilst not keen on the prospect of buy to let, I quite like the idea of a holiday let in a seaside hot spot (2hrs away). Management would be left to a local agent. Similar properties where I'm looking tend to be occupied for 120-140 days per year. Given the relative proximity, family members would occasionally use it as a weekend retreat when vacant (not so appealing with an office site!).
I've started with basic research to see what constitutes a holiday let and understand tax treatment, but curious whether anybody does similar, and how much 'work' it entails in real life? Does it make any profit after fees?
Many thanks!
onedsla
Wondering whether anybody has experience running a holiday let through a Ltd company?
In spare time I 'operate' a family company which owns and collects rent from a small office complex. Without any need to take capital from the business, it has accumulated significant cash reserves. Whilst my generation are unlikely to need additional support from the company, I do want to keep growing the company for the benefit of future generations.
Whilst not keen on the prospect of buy to let, I quite like the idea of a holiday let in a seaside hot spot (2hrs away). Management would be left to a local agent. Similar properties where I'm looking tend to be occupied for 120-140 days per year. Given the relative proximity, family members would occasionally use it as a weekend retreat when vacant (not so appealing with an office site!).
I've started with basic research to see what constitutes a holiday let and understand tax treatment, but curious whether anybody does similar, and how much 'work' it entails in real life? Does it make any profit after fees?
Many thanks!
onedsla
Hi Eric,
Thanks for responding. I've read and learned from many of your posts and really appreciate your contribution to the forum over the years.
However not clear on your logic with this one. From what I've read, qualifying holiday lets are indeed much more like a business - such as being subject to business rates rather than council tax. We're in agreement here, but why do you conclude that this makes it better off outside a company?
The main disadvantage I saw of buying inside a company wrapper was that we'd have to charge VAT (company is registered) which would be a pain. The potential workaround of creating a 'daughter company' would cause more work, which I'm trying to avoid.
Thanks for responding. I've read and learned from many of your posts and really appreciate your contribution to the forum over the years.
However not clear on your logic with this one. From what I've read, qualifying holiday lets are indeed much more like a business - such as being subject to business rates rather than council tax. We're in agreement here, but why do you conclude that this makes it better off outside a company?
The main disadvantage I saw of buying inside a company wrapper was that we'd have to charge VAT (company is registered) which would be a pain. The potential workaround of creating a 'daughter company' would cause more work, which I'm trying to avoid.
Hi Eric,
Thanks again for the response.
The holiday let is only a thought at present. I'd anticipate that higher than usual first year costs would create a reasonable loss, but it would generate a small profit (£10 - 20k?) thereon. There'd also be potential for capital gain.
Having to ring fence that loss against the holiday let would be annoying. Think you've put me off the idea. Would a 'traditional' buy to let held by the company be any different?
Thanks again for the response.
The holiday let is only a thought at present. I'd anticipate that higher than usual first year costs would create a reasonable loss, but it would generate a small profit (£10 - 20k?) thereon. There'd also be potential for capital gain.
Having to ring fence that loss against the holiday let would be annoying. Think you've put me off the idea. Would a 'traditional' buy to let held by the company be any different?
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