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.
- Agricultural Land Hold Over and Roll Over 68 2
- Legal Advice Needed Bank Account Blocked 157 2
- Real names 461 18
- Taxfiler - is it really good? 142 6
- Tax relief on licence costs 102 1
- Who owns the data 181 3
- Clarification over - VAT Box 8 - Flat rate scheme 131 5
- Sole Trader Fees 93 1
- Director hired as an individual 24 1
- VAT charge needed on van sale? 60 1
- Loan interest rental property 182 5
- Proceeds of Overseas Property Sale - Any Tax Implications 107 4
- Theatre as charitable company 32 1
- Peer to Peer lending 116 5
- What's the plural? 660 14
- Garage Conversion -Ltd Company Office 92 1
- Well well well 240 2
- Capital Gains Tax 106 3
- Dividend payment date 1,847 32
- Use of aliases 702 19
- Proposed Amendments to IAS 1 568
- Property exchange - 8-year legal delay following fall-out 429
- Accounting for Insurance Premium Financing 331
- IFA incorporation 306
- Mortgage interest claim on Buy to let hic up 298
- Can the receivers fees be allowed for tax? 284
- Moving into own BTL property - allowable costs 248
- SAGE Payroll Data for Import to MS Dynamics AX 234
- Will Ni be payable on the salary I receive abroad ? 226
- Sorry ignore me 218