Audience 1: As the sole director of a small business I was wondering whether it might be better to buy personally, or buy through the business, if you like. You know – what the pitfalls might be by doing that or which would be more advantageous to myself really.
George: I think the first thing is – you’ve got to - if you’re buying through the business, it’s not yours – it’s owned by the business. So if anything happens to the business, you’ll lose the property as well.For me that’s the biggest pitfall – you’ve got to be really careful of that. I mean, you should probably speak to your accountant about what the tax benefits are to you personally, because it can work in your favour but sometimes it can work against you, depending on what your personal situation is. But the biggest thing is the level of - if you like - risk by having it in the business. And obviously, if you sold the business, you’d have to sell the property as well – unless you did some sort of clever legal transaction as part of that - you know – so just, you’ve got to be really really careful with that. And it depends how many properties you’ve got, or whether that’s going to be your property. I mean, I’m assuming you just want one – because that’s why you’re here, but generally, generally it’s better for you to buy it personally.
Craig: And normally, the other thing on tax is obviously, that if you were to live in the property, which presumably would be your intention, you’d be liable for benefit in kind tax. Because the company, even though it’s your company, is providing you there, so you’d be getting a tax bill for living there.
Whereas obviously one of the benefits with owning with own home, as I’m sure you’re all aware, is, if you do sell a home, make a profit, it’s, if it’s personal residence, it’s tax free.
It’s also, from a lender’s point of view, you wouldn’t be able to get a standard, kind of, residential mortgage that you would get on the high street, you’d be then talking to the, kind of, business banks, which makes it slightly more complicated and often more expensive.