I currently have a limited company (L1) which owns properties (residential real estate), some of them mortgaged. Through refurbishing these properties L1 has accumulated losses.
L1 is also managing the properties (lettings etc).
My goal is to create a new second limited company (L2) that does the day-to-day running of things and L1 would essentially only hold the properties (and the mortgages).
How can I transfer the losses from L1 to L2?
The overall purpose of our ventures is to buy, refurbish, hold and rent out residential properties and we want to do more of that going forward. This means that we will create new losses through replacing and renewing on a like-for-like basis during the refurbishment process. We generally don't trade properties (buy to sell). The reason for wanting to separate the holding from the management is to spread risks and protecting assets.
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Replies (4)
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Why do you think that losses can be transferred?
Why do you think refurbishment expenditure is a loss?
What does your accountant advise?
Do L1 and L1's shareholders/directors have an accountant/tax adviser?
If not, the best advice is to appoint one to ensure that the full implications (short and long term) for them all is properly understood in formulating and executing any change plan.
