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bigduckontax, Accountant
Category: Tax
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If I have a LLC and only myself and spouse are employees, to

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If I have a LLC and only myself and spouse are employees, to keep a good level of business I leave my home and rent a new home elsewhere so I can gain more work and offer my services. My home stays furnished but unoccupied for many years, As part of my agreement with clients they pay my rent throughout the time away from home. After two years I pay tax on all my income including the rent etc (which effectively becomes additional income) What tax allowances, if any can I claim for my home to optimsise my tax position for either corporate or personal tax ? Regards Ian
Hello, Ian, I am Keith, one of the experts on Just Answer, and plesed to be able to help you with your question. Do you live in job related accommodation at your new location?
Customer: replied 1 year ago.
Yes which I arrange and pay for myself but invoice my client for accommodation costs. My home is 300 miles away. My wife and child live with me at the work location. I have done this for nine years but about to move back home and find alternative clients.
Customer: replied 1 year ago.
Good morning Keith by the way.
There are no tax allowance that you can claim for your home save Private Residence Relief (PRR) when you eventually sell up. PRR relieves Capital Gains Tax (CGT) at 100%. Taxation has the following advice on the matter of job related accommodation: 'Nevertheless, a house is deemed to be occupied by its owner as a residence even though there is no actual, qualifying occupation of it if he resides in job-related living accommodation and intends in due course to occupy the house as his residence' Thus in your case PRR will be extended for the period your were in job related accommodation and you will escape any CGT on disposal in the longer term. I do hope that I have set your mind at rest on this matter.
Customer: replied 1 year ago.
Keith just to expand a little I rent a house in Cardiff which I pay council tax , utilities etc. I kept my home in Cumbria and pay mortgage, council tax and all running costs there too, so effectively double. I pay full Corp tax is 20% on the subsistence income for the rental property in Cardiff.I now have your answer which suggests there is nothing to ease my position. I rent the work accommodation so there is no sale when I move, so presumably no Capital Gains there. I own my home in North England which I guess if I move, as my sole property will not attract tax.
Customer: replied 1 year ago.
Was your answer written as though I own a second property at my work location ? This is only rented Keith.
Unfortunately, this is not quite the case. As you are not living in your Cumbrian house PRR does not apply, but because you are living in job related accommodation in Cardiff PRR is extended so it does! As for having to meet the running costs of both residences that is simply your choice and there are no reliefs available. I am aware that you only own the Cumbrian residence. There is no CGT liability in your case anyway for reasons I have explained. CGT is a thoroughly nasty little tax liable to raise its head and bite unexpectedly as indeed it would have dome had your Cardiff residence not been job related. I know of one case where a father bought a house for his son to live in at uni, but kept it in his own name. His son stayed on. When Dad eventually came to sell it cost him 39K in CGT to dispose of a property which he had never occupied nor had any benefit therefrom.
Customer: replied 1 year ago.
OK thanks Keith. Can I claim for associated costs for board meetings being held at my Cumbrian residence, which is still our real base ie travel expenses ? Any other obvious avenues ?
Your company can reimburse these through its own funds where Board Meetings are held elsewhere. Such out of pocket expenses are outside the scope of UK taxation for the individual recipients. They are, of course, allowable against the company's Corporation Tax (CT) computation as an administrative expense. Please be so kind as to rate me before you leave the just Answer site.
Customer: replied 1 year ago.
OK thanks Keith
Delighted to have been of assistance. Please don't forget my rating.
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