Residential Investment Property Dilemma

oldbikebloke

Anon4tax said:
Yes the intention is to settle down in one property and formalise a business developing properties on a commercial basis. I think the law is a lot looser than you think in regards to buying a property, renovating it and selling it on when it is your genuine place of residence. I enjoy moving and exploring different areas and finding where i want to settle down, this doesn’t mean i have to be subjected to a life of renting! but i get your wider point and the intention is not to evade tax as that is illegal and immoral but i’ll set up a fully fledged tax paying business when the times right. Thanks for your advice

I agree your question is will I get away with this because the law is "loose"

you might, you might not, but HMRC stance is clear - you are buying with the intent of trading (developing & selling).
Living in it whilst so doing is not a defence if you claim CGT exemption on your profit rather than pay income tax 
BIM60530 - Business Income Manual - HMRC internal manual - GOV.UK (www.gov.uk)

[Deleted User]

Anon4tax said:

Thank you for your responses. It may sound too good to be true but this is an actual deal i’ve partly done! The figures aren’t the actual question. The question is about changing the agreement and whether or not it’s fair to do so? Also i’ve learnt my lesson about getting agreements in writing but that’s also not the dispute my partner wants to change the arrangement!

I've spent a considerable amount of time sourcing the deal. If you’re interested ive put more figures at the end the sale was supposed to be completed before Christmas but we’ve had to delay completion and that’s why the cost are above £10k. I can source similar deals!

purchase price: £320k
refurb & decorating: £1,250
legal fees: £2,462.95
5 months rent: £4,850
council tax: £444
estate agent fees : £3,750

Where’s the SLT in this? It should be £9,600 because the higher rate of SDLT for the purchase of residential properties should have been due because it is an additional residential property for your business partner by the sounds of things and he is most definitely a beneficial owner if he’s expecting to benefit from the increased equity. 

Anon4tax

Lover_of_Lycra said:

Anon4tax said:

Thank you for your responses. It may sound too good to be true but this is an actual deal i’ve partly done! The figures aren’t the actual question. The question is about changing the agreement and whether or not it’s fair to do so? Also i’ve learnt my lesson about getting agreements in writing but that’s also not the dispute my partner wants to change the arrangement!

I've spent a considerable amount of time sourcing the deal. If you’re interested ive put more figures at the end the sale was supposed to be completed before Christmas but we’ve had to delay completion and that’s why the cost are above £10k. I can source similar deals!

purchase price: £320k
refurb & decorating: £1,250
legal fees: £2,462.95
5 months rent: £4,850
council tax: £444
estate agent fees : £3,750

Where’s the SLT in this? It should be £9,600 because the higher rate of SDLT for the purchase of residential properties should have been due because it is an additional residential property for your business partner by the sounds of things and he is most definitely a beneficial owner if he’s expecting to benefit from the increased equity. 

The purchases was done in my name.

SpiderLegs

Anon4tax said:

Lover_of_Lycra said:

Anon4tax said:

Thank you for your responses. It may sound too good to be true but this is an actual deal i’ve partly done! The figures aren’t the actual question. The question is about changing the agreement and whether or not it’s fair to do so? Also i’ve learnt my lesson about getting agreements in writing but that’s also not the dispute my partner wants to change the arrangement!

I've spent a considerable amount of time sourcing the deal. If you’re interested ive put more figures at the end the sale was supposed to be completed before Christmas but we’ve had to delay completion and that’s why the cost are above £10k. I can source similar deals!

purchase price: £320k
refurb & decorating: £1,250
legal fees: £2,462.95
5 months rent: £4,850
council tax: £444
estate agent fees : £3,750

Where’s the SLT in this? It should be £9,600 because the higher rate of SDLT for the purchase of residential properties should have been due because it is an additional residential property for your business partner by the sounds of things and he is most definitely a beneficial owner if he’s expecting to benefit from the increased equity. 

The purchases was done in my name.

How did your business partner invest his money into the deal?

Anon4tax

They gave me cash

[Deleted User]

Anon4tax said:

Lover_of_Lycra said:

Anon4tax said:

Thank you for your responses. It may sound too good to be true but this is an actual deal i’ve partly done! The figures aren’t the actual question. The question is about changing the agreement and whether or not it’s fair to do so? Also i’ve learnt my lesson about getting agreements in writing but that’s also not the dispute my partner wants to change the arrangement!

I've spent a considerable amount of time sourcing the deal. If you’re interested ive put more figures at the end the sale was supposed to be completed before Christmas but we’ve had to delay completion and that’s why the cost are above £10k. I can source similar deals!

purchase price: £320k
refurb & decorating: £1,250
legal fees: £2,462.95
5 months rent: £4,850
council tax: £444
estate agent fees : £3,750

Where’s the SLT in this? It should be £9,600 because the higher rate of SDLT for the purchase of residential properties should have been due because it is an additional residential property for your business partner by the sounds of things and he is most definitely a beneficial owner if he’s expecting to benefit from the increased equity. 

The purchases was done in my name.

SDLT is based on beneficial ownership not legal ownership. 

SpiderLegs

Anon4tax said:

They gave me cash

What a pair.
round my way we have an area which has a number of small businesses operating in this kind of way. They are in the most part set up as money laundering operations by low level drug dealers.
inevitably they fairly quickly come to the attention of the authorities despite their best efforts at pretending they are otherwise.

good luck in your ongoing venture.

Anon4tax

to be honest this forum has been useful. it’s never been my intention to evade tax i’ll give the HMRC a call and discuss my affairs and pay anything that’s due. thanks for all your help everyone.

[Deleted User]

Anon4tax said:

to be honest this forum has been useful. it’s never been my intention to evade tax i’ll give the HMRC a call and discuss my affairs and pay anything that’s due. thanks for all your help everyone.

You’re probably better off getting a good accountant rather than relying on HMRC’s call centre. If you ask a question that’s not on the flow chart you’re stuffed. 

Anon4tax

Lover_of_Lycra said:

Anon4tax said:

to be honest this forum has been useful. it’s never been my intention to evade tax i’ll give the HMRC a call and discuss my affairs and pay anything that’s due. thanks for all your help everyone.

You’re probably better off getting a good accountant rather than relying on HMRC’s call centre. If you ask a question that’s not on the flow chart you’re stuffed. 

I have actually consulted a tax lawyer and he he expressed to me that there has has always been a grey area around my situation. i’ll probably go over this forum discussion