russ295 Posted January 1, 2007 Report Share Posted January 1, 2007 hi sherena, after using your wealth of info again! looking to purchase a new car in march, i am considering a business contract hire, i am looking to put it in my wifes name, she has a hairdressing salon (not vat registered) and our two commercial properties are in her name, what are the benifeits, (if any) of doing it this way. thanks and all the best for 2007 russ Link to comment Share on other sites More sharing options...
plym77 Posted January 5, 2007 Report Share Posted January 5, 2007 Hi Russ In order to claim the interest as tax relief against your properties, you would need to remortgage your commercial properties to purchase the car - ensuring that that total value of your commercial property mortgage does not exceed the value of the property when first introduced to the business. In your case it would probably be more sensible to do the following: As your wife has a business, buy the car for the purpose of the business. The purchase cost of the car (including VAT) would be subject to capital allowances (CA) at 25% reducing balance (maximum of £3k pa), adjusted for private use of the car (which would include use for managing the commercial properties). For example, car costing £13k, year 1 you could claim 3k CA (subject to private use), in year 2, £2.5k, year 3 £1875 and so on. In addition, the HP/Loan interest on the car would be claimable (again subject to private proportions), as would the running expenses. In addition, I would then claim 40p per mile against your commercial property for genuine miles done in connection with the running and management of your commercial properties - but be sure to 'disallow in the salon business' so as not to claim twice! I hope this helps Regards Sherena Link to comment Share on other sites More sharing options...
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