Question:
Can my company buy my house and rent it out? At the same time, I would be buying a new house where we would live using some of the money that my company used to buy my house to buy the new one. What are the tax implications?
Arthur Weller replies:
Your company can certainly buy your house from you and rent it out. But look at www.gov.uk/hmrc-internal-manuals/employment-income-manual/eim21660 and 21661 where you can see that if you charge your company more than the market value for the house, then there will be an income tax charge on you. Whatever you charge the company, the company will have to pay stamp duty land tax on the purchase price, and will be liable for the extra 3% charge. See www.gov.uk/government/uploads/system/uploads/attachment_data/file/508272/GuidanceNote_Final.pdf, section 5, and also Q24 on p 28.
