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.
- Increasing the personal allowance: A top priority? 475 18
- Double tax treaty Italy and UK 96 1
- Anyone Heard of This Outfit? 1,103 7
- Bereavment payment 84 1
- Can anyone advise on the best VAT Scheme to change to? 273 4
- Apologies for reposting this but first post was on Friday afternoon! 343 2
- CT600 Computations - Company Tax Return help 1,294 14
- Sage Bank Reconciliation 146 2
- Companies House incorporation service 348 12
- Factors affecting tax charge FRS 19 (marginal rate) 75 1
- P35 and Service Company questions 149 3
- VAT chargeable to conference attendees 193 6
- Is Accountancy Becoming like an Insurance Policy 203 1
- Long period of account for Corporation Tax 266 7
- Flat Rate VAT and EU sales (Non VAT) 143 3
- NIC £2000 Allowance - Care Support Worker 152 3
- VAT, vans, sole traders and business use. 1,598 12
- Share Capital 131 2
- Trading income or not? 197 1
- Charge HMRC 424 3
- Xtuple 549
- Qtac payroll for bureau 376
- Confused - Professional Association a Mutual trader, or not? 317
- Industrial & Provident Societies 314
- Why would HMRC offer to close an investigation by contract settlement 291
- CIS schemes 223
- Domain name sale and limited company 205
- Investment 187
- Director legal fees in loose connection to the company 185
- Italian friend wants to set up a UK company to reduce taxes 178