Will this tax saving strategy work?
Question I understand that it is possible to set up a Company for the purposes of sale and leaseback of furniture and furnishings for one's own buy-to-let properties. Having sold the furniture and furnishings to the Company, they are then rented at say 25% of the asset value for four years when they are then written off. The advantages of so doing are apparently that the rental is tax deductible and the 10% wear and tear allowance is still allowable. Apparently there are also advantages concerning Capital Allowances. Is the above true, and are there any pitfalls?
I believe that this concept would work and is very similar to the article on the website called ‘A Gameplan for Property Investors’. The only issue is that you need to decide if it is worth the effort of setting this up. If you are prepared to do it then it can be a useful tax minimisation strategy.
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