Yup, another topic about taxes and maybe creating a company or partnership.

[Lia20616]

Hi all,

Im an experienced Airbnb host. Thigns have been going well for many years and we are now at the point of what to do from a tax point of view.

I earn a good wage part time and manage our Airbnb cottage. I do not draw a wage from this. 

The money which comes in from Airbnb we (my partner and I) want to use to renovated another property, which is a barn, currently owned outright. The barn has no utilities and is totally not livable in its current state.We might want to rent out the barn once it is completed or live in it, full time, we are not sure atm.

Im tyring to work out what is best for us from a tax point of view. I have been told that a partnership would help from a tax point of view. However have also been told that a limited company is the way to go - however I understand that this would cause problems further down the line if we were to sell the property/ies.

Any advice is most welcome!

[Mike-And-Jane0]

@Lia20616 You need to take your ideas to a good tax accountant. Typically the cost of renovating a place cannot be offset against tax but can be used to reduce capital gains tax when you come to sell.

As such you will need to use post-tax income to pay for the renovations.

If the current property is a Furnished Holiday Let then the income can be directed to either party in a marriage (not sure if you are not married) in any way you want so you can allocate 100% to the lower earning partner to maximise tax allowances and avoid higher rate taxes.

Other worries would be wether you will trigger the VAT threshold with 2 properties. If so then making sure one of you takes income from one and the other the other would be important (assuming this is allowed).

I assume you don't pay council tax?

By the way - your listing is set up wrong. Whilst the text says you do not allow pets the settings say you do.