Worthwhile starting a business to absorb cash?
Discussion
My wife and I have a semi-retired, semi-self sufficient lifestyle on a 20 acre smallholding. She has retired completely and has a small pension which takes her very slightly over her personal tax allowance so she pays almost nothing in tax. I have semi-retired and have a small part-time job which takes me pretty much to the same position. We both have other pension provisions which we are deferring for now until we need them later in life.
Our land provides most of our food, heating fuel and power so we live quite well within our income as it is.
Through no fault of our own, our land is going to start providing an additional small income which we don't really need and which we will be liable for tax on. We could just take the income, pay the tax on it and save the rest for a rainy day, but I've been toying with the idea of registering the land as an agricultural business and all using the income for new fences, sheds, polytunnel etc so we get the benefit for the future and avoid paying tax.
Worthwhile doing for a few thousand pounds per annum? Or more bother than it's worth?
Our land provides most of our food, heating fuel and power so we live quite well within our income as it is.
Through no fault of our own, our land is going to start providing an additional small income which we don't really need and which we will be liable for tax on. We could just take the income, pay the tax on it and save the rest for a rainy day, but I've been toying with the idea of registering the land as an agricultural business and all using the income for new fences, sheds, polytunnel etc so we get the benefit for the future and avoid paying tax.
Worthwhile doing for a few thousand pounds per annum? Or more bother than it's worth?
JPJPJP said:
Formally making the land an agricultural business and / or property could be beneficial for inheritance purposes if that matters to you
Yes, I'm interested in doing that, we'll be here till we die, and the house/ land will be by far the bulk of our legacy to our kids. We bought it as a single entity but I understand that there's too much land for it to be considered a garden under inheritance tax rules. Is agricultural land different?I tend to agree with the other contributor's though that it may be too much faff. We changed our lifestyles to have a very simple "retirement" without any unnecessary hassle. Just a shame to hand over money to the government if we don't need to.
Stay in Bed Instead said:
If you create a business of the land wont all the produce you grow then belong to the business and you will personally have to buy it from the business?
I don't think so, I don't know of any law that tell a business what to do with its produce. But even if that was the case. I could sell it to myself at one pence per ton if I wanted. Don't need to make a profit.Stay in Bed Instead said:
One word, well three actually.
Benefit in Kind.
I did wonder about BIK but in reality when it comes to produce or such like it’s so intangible surely it wouldn’t be on any radar? I’m squeaky clean when it comes to my accounting but surely in these circumstances it’s a non-issue. Benefit in Kind.
You need to fill the land with donkeys. Register as a charity, buy the donkeys for about £20 ( this entails lots of expenses, luxury holidays abroad, sorry, emergency rescue missions) then lease them out to multiple donors on big standing orders that you attract through social media using sad photos of donkeys and the implicit threat that you’ll kill them if they don’t set up those standing orders. As trustees you then pay yourselves £250k per annum.
Remember, it’s not fraud if it’s a charity.
Does this help?
Remember, it’s not fraud if it’s a charity.
Does this help?
DonkeyApple said:
You need to fill the land with donkeys. Register as a charity, buy the donkeys for about £20 ( this entails lots of expenses, luxury holidays abroad, sorry, emergency rescue missions) then lease them out to multiple donors on big standing orders that you attract through social media using sad photos of donkeys and the implicit threat that you’ll kill them if they don’t set up those standing orders. As trustees you then pay yourselves £250k per annum.
Remember, it’s not fraud if it’s a charity.
Does this help?
I dread to think what you did to the apples.Remember, it’s not fraud if it’s a charity.
Does this help?
There is absolutely no way you'll get past HMRC with a "business" that claims expenses but doesn't (try to) sell anything. The objective of making a profit is crucial, whether or not it's achieved.
Investopedia: "The term business refers to the organized efforts and activities of individuals to produce and sell goods and services for profit."
Investopedia: "The term business refers to the organized efforts and activities of individuals to produce and sell goods and services for profit."
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