Company ownership of property

I was contacted by a friend of a friend last week. I was pretty surprised when they told me that they originally purchased their house via their UK Ltd company. Apparently they originally purchased it with the intention of letting it but changed their minds and now occupy it as their main residence, and don't own any other property. This serves as a useful warning to anyone contemplating doing this. In particular if you've got significant amounts of cash in a company it can be tempting to think "I'll save on income tax on extracting profits by buying the property through the company". If you're planning to live in it should wherever possible be avoided. Firstly you've got an annual benefit in kind tax charge on the benefit of living in company accomodation rent free. Secondly there's the massive tax problem on a disposal. If you own personally any gain is likely to be exempt but the company will only get relief for the effects of inflation. In addition any transfer to you would be taxed as well (potentially to both corporation tax and income tax). Therefore if possible don't buy property via a company if you're going to live in it! Check out these articles: When not to use a company Using a property company - some numbers