Setting up a company to run new holiday home

If you are planning to buy a rental home, or you're thinking about what to do with one you have just acquired, this is the place for any questions about starting out in the rentals business.
HesterHare
Posts: 5
Joined: Thu Apr 12, 2018 12:41 pm
Location: Lake District, UK

Setting up a company to run new holiday home

Post by HesterHare »

Hello. I've just joined and am enjoying reading the posts. We are due to start letting our newly done up holiday home in Windermere - once I've locked all the tradesmen in to finish off their jobs ;-)
Setting up and running it is currently my main job whilst my husband has a PAYE job and pays higher rate tax.
I would like the income from this let to be mainly ascribed to me as I'm doing most of the work (or even 80/20, 90/10 split). Has anyone set up any sort of company or partnership to facilitate this? I don't want to set up a limited company as we've only got this place so that seems overkill.
Grateful for any advice. Thank you.
ianh100
Posts: 598
Joined: Thu Jan 10, 2013 4:37 pm
Location: Sherborne Dorset

Post by ianh100 »

Hi HesterHare

If you ensure you meet the HMRC rules to qualify as a furniched holiday let you are (currently) allowed to declare the income in whatever ratio you wish. We are in the same situation as you and declare all of the income in my wife's name. I declare my interest in the business on my tax return but no income. This is a key advantage of running an FHL business over a buy to let.

You don't need to set up a company or partnership, just do your tax return as a sole trader.

Of course HMRC can change these rules at any time so you can't build a long term business case on them remaining.

I would recommend you use an accountant familiar with FHL as there are a number of other options to consider like capital allowances. You can also use FHL income towards your own pension payments as well.

Good luck
HesterHare
Posts: 5
Joined: Thu Apr 12, 2018 12:41 pm
Location: Lake District, UK

Post by HesterHare »

Thank you Ian, very helpful :-)
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