Business premises expense?

[silverfox1060]

Hi just in the process of going into a partnership with a collegue and wondering if i could claim expenses for the unit i am going to use to store the coaches. Now the only problem i have is my collegue is in the process of buying this unit on his own but we have a 50/50 stake in the business and i would prefer not to invest in the unit.I am just wondering if i could still claim expenses even tho my partner will own the unit? I will be paying half towards the mortgage as rent and will thhs affect my partner?

[Eric Mc]

It sounds like a complicated set up.

Is the business a limited company or a partnership.

Will the "business" own the premises?

[silverfox1060]

Thanks for the reply Eric, at the momment the business is trading as a sole trader,but when i join then it will be set up as a limited company, the premises will be in my partners name and not of the business. Would this make it eligeable for me to claim expenses on the unit?

[groomi]

'You' as an individual cannot claim expenses for something which the 'business' pays for.

It would seem that the business will pay the Landlord rent for the premises. This is an overhead to the business and will reduce the profits of the business on which corporation tax is calculated. That is where the 'off-set' will be.

You as an individual are not part of the equation.

Your business partner (the Landlord) will receive the rent payment either to him personally or if the premises are owned by another of his companies, then to that. If personally, then he will have to declare this income on his SA and will be taxed accordingly. If to another business, then it forms part of that businesses profits and your partner as an individual will not be part of the equation.

Edited by groomi on Tuesday 3rd February 17:36