Changing business to a LTD company effect on BPS

[Coximus]

Due to issues with the death of a landlord coinciding with renewal - I will probs have to rent my largest block on an short 2y FBT (replacing the previous 5y) due to the trustees rules or someenthig along these lines - as the clock is ticking I cant really argue - and they're not otherwise been awkward - just insisting I rent this block as a LTD company and put a £500 bond down (i paid 1k bond last time.....) Apparently its to do with insurance, and the way they have to execute the estate as some land was in trust, other owned in own name and many many business assets and other property in the trust. The trustees are the same people I dealt with before anyway. They cant change much as they've insured and set everything up already and the land rental is peanuts (50ac at £45) compared to everything else (dozens of let properties).
i
Do I just use my Ltd company to make a claim, and transfer the entitlements over to it? I also borrow entitlements off the LL - and they would do the same here. I could either claim all my land this way, or just this block?

I also have a 3% Cross compliance penalty (due to another landlord burning rubbish in a field ) although im appealing th is as I dont even claim on that land (liccenced but someone complained and APHA turned up, vet said the bonfire pile was a hazzard to the livestock).

Would the LTD be excluded from the 3%? If so obviously Id want to move the whole lot over and save the RPA nightmare of dealing with them.

Otherwise just LTD company the rented land (about 70% of my claim).

 

[Frank-the-Wool]

Due to issues with the death of a landlord coinciding with renewal - I will probs have to rent my largest block on an short 2y FBT (replacing the previous 5y) due to the trustees rules or someenthig along these lines - as the clock is ticking I cant really argue - and they're not otherwise been awkward - just insisting I rent this block as a LTD company and put a £500 bond down (i paid 1k bond last time.....) Apparently its to do with insurance, and the way they have to execute the estate as some land was in trust, other owned in own name and many many business assets and other property in the trust. The trustees are the same people I dealt with before anyway. They cant change much as they've insured and set everything up already and the land rental is peanuts (50ac at £45) compared to everything else (dozens of let properties).
i
Do I just use my Ltd company to make a claim, and transfer the entitlements over to it? I also borrow entitlements off the LL - and they would do the same here. I could either claim all my land this way, or just this block?

I also have a 3% Cross compliance penalty (due to another landlord burning rubbish in a field ) although im appealing th is as I dont even claim on that land (liccenced but someone complained and APHA turned up, vet said the bonfire pile was a hazzard to the livestock).

Would the LTD be excluded from the 3%? If so obviously Id want to move the whole lot over and save the RPA nightmare of dealing with them.

Otherwise just LTD company the rented land (about 70% of my claim).

You have a huge number of different issues here and little time to do all the changes.
It will cost you, but you need some professional advice.
Have they complied with the terms of the 5 year FBT?
You can use your Ltd company but you will need to get a new SBI number and set up a new business. Not sure how long this will take, but once done you can transfer the land and entitlements to the Ltd company.

The cross compliance penalty is nothing to do with the Ltd company but your present business. and to be honest you will win the battle over this one day as the bonfire was nothing to do with you or on land you claim. Will you still be claiming on the original business as well?

If I were you I would only claim the 50 acres this way as the potential for a cock up at this late stage is too great to make a mess of the rest of your business.

 

[Salopian_Will]

A few comments:

1. Get some advice on your renewal. Trustees obligations etc is an easy line to trot out and time pressures should not be a reason to cave.

2. I am baffled why they want it in the name of a LTD company. Normally a personal tenancy has much more stature as you can be sued personally whereas a Limited Company puts a third party entity in between which can, ultimately, be dissolved.

3. If you have to put the tenancy in the name of the LTD company either compromise and put yourself and the Ltd Company as joint tenants or seek wording in the tenancy that allows you personally, under license or similar, to make the BPS claim. You have until now and 15th may to get everything into the name of the ltd company and frankly that is a lot of faff and may not be doable. See (1) on getting advice.

4. If the cross compliance breach has happened then there is no point arguing with the RPA. The claim should be against your landlord who caused your loss.

 

[Bongodog]

To echo WillB, it makes zero sense for anyone to insist on only dealing with a Ltd company. For some insane reason many people think that a Ltd company is a far more respectable entity than a sole trader. They fail to appreciate that the sole trader has to pay up unless they literally have no money, but the same person via a Ltd company can walk away from their business debts whilst retaining their personal wealth.

 

[Coximus]

While I agree it makes no sense, some of the trustees literally have no idea about farming or agriculture and have made clear they dont want to either.
Their solicitor basically said Its that or nothing, as the rental from this land doesn't even scratch 1% of the income of the estates assets, so i wont change a thing moaning, it will just go out to another tenant or be left unlet. The main issue is the trustees have insured themselves for their actions, and also for the assets etc of the estate and properties, and that policy required all commercial assets to be rented to LTD companies. Obviously this wont get changed for just me and 50 acres (I just found out the land may get sold anyway, they have just agreed to sell one farm to the tennant for £1.7million, so I believe them when they say for the rent due its just not worth changing their paprework).

As for the cross comp breach, I will probably just stomach it, the paucity of info on the notification letter reminded me how vague and law unto themselves the RPA are, and for 3% I really do not see the point in scrapping with them.

 

[chipchap]

The point is that it is easier in theory to research the financial standing of a Limited Company. A private individual is just that; private.

 

[Coximus]

The point is that it is easier in theory to research the financial standing of a Limited Company. A private individual is just that; private.

I belive this is one of the reasons for the insurance side of it.

 

[Bongodog]

The point is that it is easier in theory to research the financial standing of a Limited Company. A private individual is just that; private.

And for the vast majority of Ltd companies the research reveals a maximum of two shareholders, usually married to each other with a share capital of £100 or less.