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.
- TaxCalc Accounts production 112 2
- Working out private usage for a Taxi Driver? 365 8
- Fines for filing 12 months of FPS on one submission 205 3
- Running two businesses from the same premises 398 5
- HMRC BACK AND FORTH FIGHT ON BTL PROPERTY ALLOWANCES 69 2
- Invest in ''buy to let'' property 1,360 42
- How much of your work is admin? 623 5
- Nominal Ledger 386 11
- Gave wrong info to client about tax due 571 20
- Base value unavailable re. Capital Gain 187 2
- Old CGT loss 205 3
- Gov.UK = NOT OK! 172 3
- Paper tax return 154 4
- Start up allowance? 378 12
- Will I need to resign? 196 1
- Penalty for late PAYE registration? 246 3
- AIA or IFA 456 7
- Surely not? 460 10
- Batch input of data to Xero - is there an app? 643 9
- Late Registration for VAT 363 11