Becoming a Buy to Sell Property Developer

drew1234

Good evening
I am currently seriously contemplating giving up the day job to become a property developer.
Having experience in renovating all my previous homes I have a good knowledge/skill set and a range of tradesmen I could use to develop properties,
I am looking for advice with regards to taxes and expenses related to the purchase and sale of these second properties.
I know I will be paying a greater amount of Stamp Duty but will I need to pay both Income Tax and Capital Gains Tax?
Any advice on this and any other costs I need to consider would be greatly appreciated.
Kind regards
Andrew

Doozergirl

How to put 17 years of my life into a forum post?

We were advised from the very start to set up a limited company and this has served us.

Don't scrimp. Do good by people. Karma is a what she is.

drew1234

Thank you for your reply and advice, a career change to property from the education sector is a big decision. Do you have any recommendations of literature I should read before I take this step?
I am more than comfortable with the developing aspect, it's the business/finance side I need to research/read up on.

Doozergirl

Find an accountant.

People are usually in business because they're good at what they do, not necessarily that they are good at business. The business of being in business is the business . Thankfully, there are plenty of people you can outsource the business side of things to.

It's impossible for me to answer general questions. You need to find the sort of thing you want to buy etc then work out how to fund it and speak to an accountant with the scenarios and allow them to recommend how you structure your business accordingly.

As a developer, you have to enrol in the CIS scheme and pay your subcontractors PAYE on their behalf. That counts whether you are Limited or just a sole trader.

AFF8879

Do as much of the work as possible yourself - simple(r) things like tiling, fitting new flooring, hanging wallpaper etc are surprisingly costly to have done professionally- so learn as much as you can, and nowadays you can YouTube everything anyway

G_M

As an educator you are doubtless already a member of your local library:

https://www.amazon.co.uk/Property-Development-David-Cadman/dp/0419202404

https://www.amazon.co.uk/100-Property-Investment-Tips-accelerate/dp/1507694903/ref=pd_sim_14_1?_encoding=UTF8&psc=1&refRID=DWV5C9C5VF2MESXYWD6R

https://www.amazon.co.uk/d/Books/Property-Investment-Beginners-Geek-guide-Rob-Dix/1484116275/ref=pd_sim_14_1?_encoding=UTF8&psc=1&refRID=GBBXNH2P5E30GDQYBQVF

No special recommendations, but the more you read the more you'll learn....

booksurr

and for the sake of a brief tax answer: no you do not pay CGT if you are a property developer, you are deemed to be carrying on a "trade" and are therefore subject to income tax on your profits - if a sole trader.

obviously if you own and trade through a company then it pays corporation tax and you take a salary and/or dividends. You should not attempt corporate accounts yourself, there is a reason they are called statutory accounts - get an accountant for them

you will also need someone to advise on how the company is going to raise the finance to make the purchases in the first place

drew1234

Thanks for all the messages and advice, I feel I have the experience and skills to do a lot of the work myself but just need to "do the numbers" and see if I can afford to make a career change.

ReadingTim

If you don't know what the position is with regard to "taxes and expenses related to the purchase and sale of these second properties" then I seriously suggest you don't give up the day job.

Asking for anecdotes from randoms on an anonymous internet forum is no substitute for your own research, and if you genuinely don't know where to start, it probably means you're not ready to start.

pioneer22

How much starting capital do you have?
How long can you afford to live off your savings?
How is your credit file?

drew1234

Thanks for the advice ReadingTim, that's why I posted the question on here...I'm not ready to start just investigating whether it would be worth it.

I have £150,000 to Invest in this venture. I could make a year living off savings and my credit score is good.

Just looking at a new avenue to pursue.