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Readers forum: On company time

29 May 2018
Issue: 4649 / Categories: Forum & Feedback , Land & property

The potential corporate and personal tax issues from refurbishing a let property using company funds

My client has a limited company through which she trades and a property she lets out but it needs to be refurbished. She has observed that if she takes money out of the company to fund the improvements she will pay a considerable amount of income tax on the dividends. She has asked whether there is any way in which the company could pay the expenses possibly also becoming entitled to the income in the future.

I don’t think this is possible without transferring the property into the company which would incur stamp duty land tax and is clearly not a good idea. But am I missing something?

Is the fact that the expenditure will in due course reduce the income tax on future rent the best relief my client will get?

I look forward to hearing from Taxation readers.

Query 19 172– Fuddled.

Reply by Annette...

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