Redevelopment - Business or Private?

smudge_2

Myself and a friend are about to purchase a property and redevlop it for future sale in order to make some money! Now plenty of people are already doing this and I am wondering if there are any tax advantages, or money saving tips, by either Purchasing the property within a new limited company, doing all of the work through the books and then selling it, or maybe purchasing the property privately but doing the work through a company? It wont be a full scale knock down - re-build so the work wont be zero VAT rated and the other thing to say is that we will probably go on and do another when this one is done, rather than take the money.
I hope this is an ok ask in this thread. Thanks for reading

Chris - What's a day off?

mr.broderick

Are people still doing this?

wecanhelpu

Sound like a great idea to me

Doozergirl

I think companies are better geared up to avoid tax on decent sums of money. It depends on how much profit you stand to make and whether you have another job; I think companies are better geared up for tax benefits on career replacing sums of money.

If you have company, you can get trade discounts on materials but you can often blag these anyway or, equally, shop around, hard!

But if there's two of you, you have a CGT allowance of £9,200? each this year. So if your profit is less than £20,000 then it's simpler to go it alone.

Of course if you live in the property for a decent time period, you pay no tax at all on your profits, regardless of how much you make.

smudge_2

I knew a message query wasn't as simple as it sounded!
I have a job, my friend doesn't. We will get the best available prices for materials in the trade anyway so that should make no difference. We are expecting this property to gain £30k - £50k after costs and expenses and whilst my friend could live in it for a short while, I could not, so how does that muddy the waters?

Thanks again

Chris - What's a day off?

Doozergirl

Mmm, you need to speak to someone who knows more than I do!

Wait and see here but also ask on the cutting tax board. You might get some more joy there.

Alan_M_2

Do it privately, the sums of money simply aren't large enough to warrant a Limited company.

Doozergirl

Alan_M wrote: »

Do it privately, the sums of money simply aren't large enough to warrant a Limited company.

Where have you been? Don't tell me you have better things to do!

Alan_M_2

:rolleyes: I've moved my business into a bigger warehouse, as if I wasn't a workaholic before, it's been almost completely consuming :rolleyes:

Sounds a strange thing to say, but too much business is as stressful as too little!

Doozergirl

All work and no play!

I recall reading now. Glad to hear, anyway

Alan_M_2

All work and no play is why I'm divorced:rotfl: Amicably I might add..

I got a puppy instead, He doesn't moan about me working all the time, He just pees somewhere when I upset him:rotfl: