God father gift?

Randall6169 wrote: »

It is s a genuine gift, he wants no part of the company or any money from it, so he doesn’t want it coming back to him in any way what so ever, the ltd company Route was an option I have looked into, some really good comments here so thanks everyone for your input

you are a plumber so focus on doing things correctly that won't attract HMRC interest given you already work in a trade notorious for tax dodges.

you want to do property development as a trading activity

forget about those talking about living there and CGT, that is dodgy. Your intent is clearly to develop and sell, that is TRADING and is subject to income tax. You are NOT investing and therefore are not subject to capital taxes.

the money given to you with no expectation of its return is a gift. As others say, there is no tax on the gift payable by you as the recipient, and Godfather's exposure to tax is all about his estate's exposure to IHT when he is dead. Live for 7 years and his estate won't have any tax liability.
The circumstances where you as recipient may have to pay tax on the gift if he died within 7 years are so exceptional they really are not worth even thinking about.

So the real question you need to ask yourself is:
do you want to trade as a company or as a sole trader ?
That is a question to ask your accountant since the attractions of incorporation depend on an assessment of your total financial position including your plumbing income

you may, for example, want to remain a sole trade plumber with a property development company as that would distance you personally from the company's performance if it fails


the question for a company is, when the 150k has been spent, will the company be able to secure sources of funding to carry on its activities given it is a new company with no track record. How good a relationship does your plumbing business have with its bank manager? Would they be happy to risk lending to a company because you are connected with it? If not, who will?

As a sole trader, you may find it easier (but expensive) to borrow money personally - bit at higher risk to yourself if, for example, it is secured on your own home ...