Property development or property investment?
Some property developers entered the market and spent significant sums of money renovating and developing a property with a view to selling it at a profit. The property is mortgaged.
They were subsequently unable to sell it at a reasonable price due to the housing market decline. To cover the mortgage interest and the other ongoing costs (service charge, ground rent) they let it at a market rent for 6 months. Now the property is vacant they are hoping to sell it and to resume their property development ambitions.
My question is, will HMRC accept they are property developers or will HMRC now insist that the property is treated as an investment for tax purposes? The owners of the property wish the property to be treated as a property development because of the large sum of money they have expended in renovating it which they believe they will lose otherwise.
Any comments or advice welcome.
- flat rate scheme 2,421 51
- Importing transactions from VT Cashbook to VT Transaction+ 42 1
- Family Partnership 342 10
- Are any of you members of The Institute of Financial Accountants - Accountnats certificate 1,260 24
- Moving to BTC from Sage Accounts Production 88 1
- Restriction of trading loss and overlap relief 199 3
- Multiple for fee bank purchase 248 5
- Business lending another business money (UK) 331 9
- Manufacturer cashback on fixed asset purchase 112 1
- Does anyone have an old version of Sage for sale? 334 7
- Problems viewing AWeb posts 220 5
- CIC Abbreviated Accounts 207 6
- Business trips - director and family 438 3
- Signed accounts for bank 692 15
- Rollover relief - No new asset purchased 339 5
- Can I prepare dormant accounts? 238 2
- How do you integrate prepaid expenses in to the cash conversion cycle? 123 2
- What route into accountancy would you recommend? 886 12
- Deferring dividends on paper 239 5
- VAT Query on new build 144 1