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15 July 2014
A little letting; ER qualification; FRS problems; H2 hole
A little letting
Advice required on the tax-efficient structuring of a new letting business.
A husband and wife have a small farming partnership which runs at breakeven. The husband has earnings from a separate employment which take him into the 40% tax band and the wife has no income.
They have obtained planning permission to renovate and convert two old farm cottages into holiday accommodation. This will cost about £300 000 plus VAT and will be funded from savings. Letting agents estimate that they could receive gross income of between £80 000 and £100 000 a year in holiday lettings.
My clients have asked me to consider three things.
- They want to recover their £300 000 tax free.
- They want to reclaim the £60 000 VAT.
- They do not want to pay higher-rate tax on...
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