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Commercial property

nicd1981nicd1981 Well-KnownLiverpoolAAT Licensed Accountant Posts: 244
A current client has asked me a few questions in regards to his purchase of commercial property .

"Cost 270k XXX to pay £100k approx
Rent from unit 20k per annum
Is the 100k a cost ie reduce profit on the year end?
Can this be a pension fund contribution?
Is the profit form rent (approx £7k per annum ) taxable?
Is there a level of profit in a company (similar to personal tax) where a company wouldn’t pay tax until the profit was above this level ie £10k profit so anything less than this no tax and anything above would be taxed?
Just looking at best / most tax efficient way of buying and running it"

I've informed him I'm not a tax advisor , and told him the extent of my knowledge but wanted to do my own research for experience.

His current limited company will be borrowing 100k to a new limited co , then this company will be renting the unit to another company .

Any thoughts on pension fund contribution ?
Nicola Donnelly ,MAAT, MIP, CIMA Dip MA

Email: [email protected]
Facbook Page: MEND Accounting
Blog: http://wannabeanaccountant.blogspot.co.uk
Twitter: @mendaccounting
Website: http://www.mendaccounting.co.uk

Comments

  • MarieNoelleMarieNoelle Trusted Regular Hampshire/Surrey borderModerator, MAAT, AAT Licensed Accountant Posts: 1,431
    Hi Nicola
    your post is not clear

    Purchase of commercial property is clearly a capital expense therefore can not be accounted for in P&L.- what is the 100K?

    There are no annual exemption/allowance for Ltd companies.

    You say rent from unit is 20K per annum but then use 7K?

    Can you explain which company does what and the connection between the client and the other two companies (% shareholding etc...).



  • nicd1981nicd1981 Well-Known LiverpoolAAT Licensed Accountant Posts: 244
    Hi Marie

    this was my clients email to me i also felt it was a little unclear. I explained to him in regards to PL and capital expenditure etc , My questions is in regards to his pension questions as in my research i couldn't find a clear cut answer

    Nic
    Nicola Donnelly ,MAAT, MIP, CIMA Dip MA

    Email: [email protected]
    Facbook Page: MEND Accounting
    Blog: http://wannabeanaccountant.blogspot.co.uk
    Twitter: @mendaccounting
    Website: http://www.mendaccounting.co.uk
  • nicd1981nicd1981 Well-Known LiverpoolAAT Licensed Accountant Posts: 244
    Its just the pension area I need to understand really , ive researched It and cant find a clear cut answer.
    Nicola Donnelly ,MAAT, MIP, CIMA Dip MA

    Email: [email protected]
    Facbook Page: MEND Accounting
    Blog: http://wannabeanaccountant.blogspot.co.uk
    Twitter: @mendaccounting
    Website: http://www.mendaccounting.co.uk
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