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.
- Rogue Accountant 2,820 46
- Getting fees, getting harder? 3,534 71
- P60 from HMRC Basic Paye Tools 5,282 19
- HMRC Scam 242 2
- Departments in Sage 50 85 1
- Where has Portia gone? 682 25
- Is it worth being a limited company if already a higher rate taxpayer? 212 2
- HMRC, YouTube, ITTOIA... 318 4
- Capital Gains? 256 2
- Associated disposals - Entrepreneur's relief 103 1
- Partial Exemption relating to a multi academy trust 72 1
- Is it possible to have an excel link to a different dated excel file 447 9
- Taxation of serviced offices 126 2
- AIA - new period 219 1
- Self assessment question 1,158 48
- Major Works Invoice to Rental Property 375 9
- What is the base cost of this asset for CGT? 265 3
- New Client wants an Income Certificate for a Mortgage 856 20
- Dividend Tax Rate 441 8
- Ex Wives Club 545 13
- Services via intermediaries and new HMRC reporting requirements 773
- RTI - duplicate employee record 509
- Pensions Regulator 438
- How hard is it to reduce a code? 394
- Sanzar 296
- Sage Vat return box 2 296
- Digital marketing focus group 275
- How do you do it 264
- Report old income 227
- Kashflow balance sheet difference 226