Buying Timeshare through ltd co

[x5x3]

Could someone explain the benefits and drawbacks of buying a timeshare through a ltd company please?

I'm happy with the risks associated with the timeshare concept itself but not sure whether it is better to buy personally or through a ltd co?

TIA!

[Heres Johnny]

x5x3 said:

Could someone explain the benefits and drawbacks of buying a timeshare through a ltd company please?

I'm happy with the risks associated with the timeshare concept itself but not sure whether it is better to buy personally or through a ltd co?

TIA!

There may well be others, but as you often can't get out of timeshare contracts easily you just let the company fold and walk away

Its a better option than leaving the timeshare to the guy that sold it to you in your will.

[Eric Mc]

Have you considered the Capital Gains Tax, Corporation Tax and Income Tax implications?

[x5x3]

Eric Mc said:

Have you considered the Capital Gains Tax, Corporation Tax and Income Tax implications?

That was the question I was asking thanks

[Eric Mc]

If an asset is owned by a company, when the asset is disposed of, the company will be liable to Capital Gains Tax on any gain.

If the asset generates regular income (rents/holiday letting income, in this case), the company will pay Corporation Tax on any profits.

If the directors/shareholders extract any personal income from the company such as salary or dividends, they will be liable to Income Tax and possibly National Insurance on the amounts extracted.

[x5x3]

thanks, the property I am considering is available on a you pay £x for week y for z years, e.g. £25K for week number 35 for 30 years.

On top of that is an annual service charge, e.g. £500.

Therefore I do not think there would ever be the case there would be any CGT as each year the value of the outstanding number of years would be less.

However I am not clear if the initial cost is tax deductible for the company or would the cost have to be spread over the lifetime of the asset?

Also if a director/employee of the ltd co actually used those weeks then would there be any kind of BIK?

Or maybe it could be claimed as an annual conference?

[anonymous-user]

x5x3 said:

I'm happy with the risks associated with the timeshare concept itself but not sure whether it is better to buy personally or through a ltd co?

Will the seller accept a £1 company as buyer? If they insist on a personal guarantee you're back where you started. On the other hand they may be more than willing to take your money and run!

For those who don't already know, one of the biggest risks in buying a Spanish holiday apartment (or equivalent) is when values fall and your neighbours decide to walk away from their investment.

Imagine a block of 12 apartments sold for £20,000 each and with a service charge of £1,000 a year. Then there's an economic slump and values collapse to, say, £10,000 per apartment. As a result, 75% of owners walk away from their investments so there's just 6 owners left. At that point you've got an unsaleable apartment in a half empty building. For good measure, your annual service charge doubles to £2,000 because someone has to pay for upkeep of the building and there's only 6 of you left. Uncomfortable....