Owner Director - Rent compulsory

B

Bmd2016

Registered User
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Hey Folks,

Not my first post but my old account seems to have ben deleted.
My question relates to a publican trade which is lived over (Pub and house all one premises).
If the trade is carried out by the owner through a Ltd company that they own, does the company have to pay rent to the director at a determined market value rate or can they just pay themselves a wage weekly?

any guidance appreciated
 
Are you saying the owner owns the place, has a flat overhead that he/she uses for their own benefit? If so, why put a value at all on it?
 
They should probably do both. Pay rent for the use of the premises, and pay a wage for the work done. That reflects the reality and clearly limits the rights of the company over the premises, which might in the event of a problem be important.

There may be a tax advantage one way rather than the other but I cannot see what that might be.
 
The premises (both house and pub) is retained by the owner, not transferred to the company. If they decided to stop trading and lease the pub part of the premises to an unknown party they would charge a market value rent... I am assuming the same applies when you own the company yourself but I cannot find definitive Revenue guidance on this.... The rent would obviously be tax deductible for corporation tax and taxed at income tax rates for the Director.. I don't think there will be any significant tax advantages as the figures are quite small. Thanks for the replies
 
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