When does trading commence?
If an individual decides that he would like to do up a property and sell it on, then he clearly becomes a property developer. He then goes to look for properties that are suitable. This takes a number of week using fuel to visit properties. He makes telephone calls etc. He eventually identifies a property which is suitable. In the process, he has incurred expenditure for aborted legal fees. However, when does trading commence?
1. Is it the day he makes the decision?
2. The day he starts looking.
3. The day he finds something?
4. The day that he sells the renovated property.
So then when does he become liable to register as self employed and start paying NIC?
Also, in respect of legal fees for the aborted purchase, would anyone agree they are deductible. Obviously if it was for a property which was to let out then it is capital and cannot be recovered, but this is clearly a trade. In that case I presume they would be deductible. After all, if he was doing up and selling on 30+ properties a year and one fell through, then the legal fees would be deductible.
Finally, if the year end comes before the sale, I presume that the loss would be available for either carry back or set off in the usual way. (think HMRC v the rabbit breeder)
- Compliance check 550 15
- Married Couples Allowance wasted? 199 1
- do i have to register new ltd practice as tax agent? 153 2
- Are clients getting more stupid? 1,331 22
- Capital gain? 171 4
- Interest paid to non-UK company - Deduction 122 3
- international employer please help!! 88 2
- accounting for this transaction 340 2
- Is there capital gains tax for selling a church? 368 5
- Tax Avoidance 196 1
- When to include value of import in Box 7 91 2
- sole trader accountant 855 15
- How could I be identified for VAT purposes in UK? 460 10
- CGT 173 2
- Sage payroll alternatives 408 4
- employer pension contributions - OMB company 181 2
- Accounts production software license expiry & possible alternatives 340 7
- Construction Industry Allowable expenses 289 8
- Recharge for private use of a company car 362 8
- vat help for catering concession 289 10
- Auto enrolment excuses 1,093
- Feedback on accounts production software for IFRS 783
- Add T&Cs to Sales Order in Sage 467
- Digita Hosted Software 283
- Call Centre Data Costs 253
- Are any of you agents for doctors? 232
- Credit where credit's due....... 229
- Buying goods in US and selling them to company in US 212
- Director phone costs 158
- RTI overpayments gap 149