New start-up property business advice

Kendonak

Hi folks!

New to the forum so there may be something already on this but thought maybe someone might have some advice.

I am currently in the process of starting up a property business which will utilise both my skills in architecture (in which I have a masters) and property development which I also have previous experience off.

I was just wondering in terms of the property development side of things if people might have an idea of the tax liabilities that would be incurred if I were to buy a property through the limited company in order to do it up and sell it on at profit.

I understand that if this was my home CGT would be applicable but through a business would it just be income tax that would apply? The purchases would be self funded as we have a bit of capital saved for the first project.

Any advise would be greatly appreciated.

K

phill99

If this was your only home that you lived in, then there is no tax liability.

Wywth

Kendonak wrote: »

Hi folks!

New to the forum so there may be something already on this but thought maybe someone might have some advice.

I am currently in the process of starting up a property business which will utilise both my skills in architecture (in which I have a masters) and property development which I also have previous experience off.

I was just wondering in terms of the property development side of things if people might have an idea of the tax liabilities that would be incurred if I were to buy a property through the limited company in order to do it up and sell it on at profit.

I understand that if this was my home CGT would be applicable but through a business would it just be income tax that would apply? The purchases would be self funded as we have a bit of capital saved for the first project.

Any advise would be greatly appreciated.

K

Limited companies pay corporation tax on their profit. You will then usually be liable for income tax on any money you receive from the limited company.

Buying a BTL using entirely your own funds is probably not a wise investment ... but getting a mortgage using a newly formed limited company would also be a challenge.

I suggest you consult an accountant before venturing into this business as I'm not sure you are doing so in the best way ... which is further complicated by your intention to move to Oz for a year or 2.

https://forums.moneysavingexpert.com/discussion/4538693

This information may help
http://www.nunn-hayward.com/downloads/Buy-to-Let-Article-for-GX-CA.pdf

but I would still urge you to seek independent financial advice regarding the specifics of your own situation.

antrobus

Kendonak wrote: »

...
I was just wondering in terms of the property development side of things if people might have an idea of the tax liabilities that would be incurred if I were to buy a property through the limited company in order to do it up and sell it on at profit.

I understand that if this was my home CGT would be applicable but through a business would it just be income tax that would apply?

....

If you are going to buy a property "in order to do it up and sell it on at profit" then you are trading, and any profit would be subject to income tax. If you did it through a company, then the profits would be subject to corporation tax. CGT doesn't come into it, because you're trading.

(Of course, lots of people buy a house, live in it, do it up, sell it for a profit, and pay no tax at all. Because it was their home, and the profit was just incidental, you understand. HMRC sometimes buy that argument.)

Wywth

As I understand from the poster's earlier thead I linked to, his plan is to spend the inheritance he will receive from the sale of his late mothers house to buy a property, do it up and then let it. CGT becomes liable of the sale profit of any BTL bought personally.

I'm not sure how he plans to do it up himself from the other side of the world ... but I'll leave that to be discussed on that other thread.

Kendonak

Wywth wrote: »

As I understand from the poster's earlier thead I linked to, his plan is to spend the inheritance he will receive from the sale of his late mothers house to buy a property, do it up and then let it. CGT becomes liable of the sale profit of any BTL bought personally.

I'm not sure how he plans to do it up himself from the other side of the world ... but I'll leave that to be discussed on that other thread.

That plan has had to be scrapped due to my wife getting a promotion at work, hence trying to think of other ways to invest. I will be offering architectural services alongside the property development and leasing all being well.