Where property is held outside the company, the proprietor can extract funds from the company by charging rent. The rent paid by the company is generally deductible against profits (provided that it is not excessive) and is taxable in the proprietor's hands. The tax effect is therefore similar to paying remuneration except that there is no PAYE to operate (the rent will be subject to income tax through the self assessment system) or NI payable.
In many cases the proprietor will have borrowed to purchase the property and the rental income will ensure immediate tax relief for the interest paid. In addition, owning property outside the company gives a large capital gains tax advantage, provided that the asset in question is used by an individual, partnership or unquoted trading company for trading purposes. If this is the case, business asset taper relief will be due on the gain arising on the eventual sale of the asset.
It would also be possible for the property to be owned jointly between spouses, therefore splitting the income and possibly making use of another personal allowance and lower rates of tax.