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Treatment of rent paid by a partnership to spouses
My clients are a husband and wife who run a trading business as partners. The business has operated for many years and until March traded from premises that were rented.
In April 2015 the couple purchased the previously rented property in their own names. They have suggested that the partnership pays them a rent at the same level (or perhaps slightly more) as it paid the previous landlord.
This sounds sensible and will remove funds from the business without I presume a National Insurance liability. However I then had it in mind that a property owner cannot pay rent to themselves. Does this apply to a partnership?
If there is a problem here it did occur to me that there were two alternatives.
The first was that the property should be conveyed into the name of one of them. The other possibility was that...
