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.
- Freelance/Employee 644 16
- Recommendations for online payroll software 189 1
- . 181 1
- Accountant Specialization. 251 2
- Can my company contibute more than 40000 to my pension in a tax year? 240 4
- Rectify overpaid childcare vouchers, how? 163 2
- CT600 - Credit balance in expenses? 163 6
- Claiming VAT on car lease 447 27
- Capital Gains Tax on property with multiple uses 94 1
- Returning papers to ex-clients 593 7
- How to network with other Accountants? 677 5
- Correcting earlier year CT600s 126 2
- Agent Authorisation Issue 184 2
- CWF1 - is it still required?? 331 6
- Is it just me ... 289 5
- Duplicating Sales and COS but does not impacting bottom line? Legal? 289 4
- CIS registration when already registered for PAYE 118 4
- HMRC Agent Accounts - PAYE 352 10
- Taxable Benefit for Director? 222 1
- Directors exempt from AE? 1,539 18
- Chart of account segments; Balance sheet vs P&L 747
- Any knowledge of salesorder.com 405
- Could and would anyone here carry out a hot file review of some non statutory audit work please? 354
- Electric Car 288
- S222 Charge 237
- Corporation tax penalties and fines on the CT600 185
- IP trans to holding company 183
- Software to Deal with Amazon and Ebay Sales 171
- AIA 166
- Best way to convert Sage data to VT Transaction+ 164