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Sale & Leasback


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Dear all, I have approached quite a few accountants with this one and cannot get a satisfactory answer to the following advice

Sale & Leaseback of your property assets.

I have found this in one of my property manuals and would appreciate your comments.

it states.

When you have portfolio of properties you have a lot of assets beds, washing machines fridges etc.


1:- Sell all of these to a limited company and then buy any further assets through this company.

2:- Lease these items back to your property company

3:-Pay 20% of the asset value as rent per annum

4:-Assume the asset has a life span of 5 years

The benifits of this action are claimed as the following

1:- The amount you pay your company in rental is tax deductable and reduces your personal tax liability

2:- When you buy through the company you can claim capital alowances which you cannot do as an individual

3:-Corporation tax on rental income is less than personal tax rates

4:- Your 10% wear & tear allowance for letting furnished dwellings is not affected

if all of this is followed you are able then for every £1,000 spent on assets it will only cost you £300

I would appreciate any comments on this, I own 5 properties and have spent approx £15,000 on assets ( I convert to HMO and studio flats) and I also run a limeted company in a different field to the property business

many thanks in advance

alan wetherall

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