rental goods

[MattDavies]

Hi,
I have been pondering for some time the legal position of rented goods. I am aware that bailiffs cannot take rented goods. So my question is as follows.. If I were to sell for a what would be considered a "reasonable amount" all my current goods to a Limited Rental company that i was the director of. And any future purchases were made in the name of the Limited company, and I rented them all back "officially" with rental contracts etc.. Could a bailiff company touch any of the goods, and would the company have any legal obligation to divulge any information to the courts or ballifs ?? I was led to believe that this is how many wealthy people work there finances, they own nothing officially and all or most of there assests are owned by third party organisations (albeit organisations that they run).

[bigbigproblems]

Re: rental goods

Hi,
I have been pondering for some time the legal position of rented goods. I am aware that bailiffs cannot take rented goods. So my question is as follows.. If I were to sell for a what would be considered a "reasonable amount" all my current goods to a Limited Rental company that i was the director of. And any future purchases were made in the name of the Limited company, and I rented them all back "officially" with rental contracts etc.. Could a bailiff company touch any of the goods, and would the company have any legal obligation to divulge any information to the courts or ballifs ?? I was led to believe that this is how many wealthy people work there finances, they own nothing officially and all or most of there assests are owned by third party organisations (albeit organisations that they run).

1) If you have "your own" limited company - you would be easily seen as the owner by a free check online.

2) Where would the Ltd company get the funds to purchase these items?

3) You would either have to spend hours doing it yourself or pay someone to do the annual accounts. The fines if you get it wrong are horrible. And if you fail the Ltd company gets dissolved and you lose your items atleast in a legal sense.

4) You would be setting yourself up for tax inspections and other problems.

5) If you cocked up any of the paperwork you would risk being charged under the companies act.

Rich people do own assets. They just offset some of them against tax (in the form of depreciation, and upfront cosy) they also generally manage to get the VAT of certain items. However I wouldn't advise it, unless you are running a company that actually turns money over and makes some.

Basically rich people do it to minimize their tax payments, not to avoid the bailiffs. I wouldn't do it - it just wouldn't work out.

Also you have to prove that an item isn't owned by you. Do you think a judge would look at this in a positive way? If it was that easy everyone would do this to get rid of bailiffs.

[MattDavies]

Re: rental goods

I wouldn't have thought that the fact that you were a director of the company would make any difference or have any bearing on a personal debt ?
Where the company got or gets its cash from is of no relevance to a bailiff or collection company, would imagine the LTD company hwould be under no legal obligation to divulge it to the company ?
Books would not be a massive issue as long as you did them correctly, same goes for inspections.
It may be obvious what you are doing, BUT i'd have thought 100% legal ?

The goods would be owned by the company which you would be able to prove through reciepts etc..

[wales01man]

Re: rental goods

Annual returns Corporation tax Returns Company accounts that need an accountant for Public liability insurance all cost time and money are you that deep in debt ?

[MattDavies]

Re: rental goods

lol no, its just something i was wondering about

[enquirer]

Re: rental goods

It's certainly possible. However, transfer of title can be challenged in court - and reversed. HMRC are also likely to take a very dim view of the practice, so one would need to be a little selective.

[MattDavies]

Re: rental goods

My thoughts were, if you did it, yes you would have to pay for accounts to be done annually HOWEVER.. The cost of that would be minimal, and it COULD be money well spent if 5 years later you got into financial difficulties and were looking at loosing your possesions/car etc .

[Sir Vere Brayne d'Emmidge]

Re: rental goods

The Limited Company would need to have a purpose to be set up, and that purpose could not be just to purchase your property and rent it back to you and you were the only client.

Now...you could start a new line of business here on LB, but you would need to employ a really good lawyer to draft the contracts.

From experience I can tell you that rich people who want to avoid paying fines that they will incur fully knowing what they are doing will be leasing most of the stuff that they own, except they, like most of us, do have hobbies as well, and they will be expensive hobbies too, so there is always something, somewhere that can be seized, and those items of personal property have a greater value to them than the money they cost.

I remember, many years ago, of a situation where, as a Court Warrant Officer (employed by the Court) I went to see a millionaire in Sussex. He owed a lot of money to HMRC and had a few fines imposed by a Magistrate Court for failing to file Company/Personal tax returns, annual accounts, the total amount was in the region of £14,500 in 1998...lots of money then, even for a rich man. On paper he owed nothing, the house was rented from the Ltd. Company (offices based on the Isle of Man, the business was classed as Management Consultancies), he was the 99.9% owner (the remaining 0.1% was his wife's who was the company's secretary), the car (a BMW 850) was leased by the same company and he paid some tax on it as a company car, the furniture in the house belonged to the wife (the house and content were left to his wife by her father in his Will, then the Ltd Company purchased the house for a nominal £10,000 when it was worth 20 times that) so that was out of the question.

On the Estate's 25 acres there were stables and horses, belonging to the wife, she had bills to prove that, a horsebox was in the Company's name, so were a couple of Ifor Williams trailers used to transport horses or bales of Hay, a couple of ride on mowers and a small tractor.

But....in the property's detached garage there were half a dozen "classic" motorcycles, belonging to him, worth around £8/9K to a collector but less than £3,000 at auction....I seized them and the moment I lay a ramp at the back of the Sherpa I was driving and started to push the first one up....miracle....a long forgotten Barclaycard Platinum appeared and the debt was paid in full.

For a duty bound and skillful Enforcement Agent (as they are known now) NO is not an answer!