Can I rent out an IP to my own company?

[BlackSpider]

Hai Guise

Just got a quick question in an area I have little experience in.
My wife and I have a business/company and am wondering if we can rent an IP to ourselves through the company, ie, company pays the rent for us. The IP is under both our personal names as an interest only investment loan. The IP is very close to our business premises and we work long hours, so don't know if this will support this situation?


Any advice would be appreciated.

 

[MCS_80]

Gday BlackSpider.

I’m no expert in this area, but think I have an answer for you. (Please correct me if im wrong SS "Experts")

Technically Yes, you can do it. However, if the ATO find out, they will not like it. It is clearly a technique to avoid paying as much tax, true? (Re-Tax Evasion)

If this is the underlying reason for doing this, then id suggest not doing it.

In the end, if YOU think its not the right thing to do and feel it may be wrong in some way, then don’t do it.

Cheers

Mick

 

[JoyBoy]

Yes you can rent the IP to your company at Market rates. In your personal tax returns you will have to include the rent income received from your company.

However, from the perspective of your company, the rent payments are not deductible because the rent payments would be regarded as private expenditure. If you are an employee of your company, there will be fringe benefits tax implications.

I would seek a private ruling with the ATO on your proposed arrangement just in case..

 

[Pushka]

I have often thought about doing this too, but not so we could live in it because I cant imagine that would be legal without the FBT, but so could use it potentially as a business premise, or provide a place for interstate/overseas contractors to stay while working for us.

 

[knightm]

Julia's bantacs website has articles on this sort of thing which I found quite helpful.