Hi everyone
I have a client who runs a limited company in the landscaping industry.
They have recently found a property (part residential, part commercial) and had an offer accepted on said property.
They are purchasing the property along with a couple of investors (the limited co will purchase half, investors the other half)
Does anyone reading his have any sort of experience of a similar scenario, and if so, what sort of structure was used following the transaction? I believe the end goal is to renovate the property with a view to rental.
Related resources
Replies (5)
Please login or register to join the discussion.
Think they first need to decide what their objectives and time horizons are. Will they (all) want to be taking money out for income or are they rolling it all up to reinvest? What is the IHT position of them all? Do they all have retirement provision? Is part residential the best option? Are all investors putting in their own cash or are there borrowings?
Similar questions crop up very frequently but, until you nail down some of the "financial planning" issues, I think it's too early to worry about structures.
Especially consider vat re commercial (is there an option to tax?) and also vat re refurbishments if say creating extra dwellings;especially given proposed end leasing one really needs all the facts to structure something that might work.
Also consider legal position amongst the parties, shareholder/partnership agreements etc, as money tends to make people fall out.
Ouch, a half cocked scheme - otherwise known as a cunning plan - what could possibly go wrong?
Agree with the above. They need to decide where they are going in order to plan how to get there - and ideally they (especially the corporate) shouldn't start driving until they know the route.
Clearly a property tax specialist is needed, but they will almost certainly need to establish a separate limited company and appropriate ownership, as it would appear to have nothing to do with the landscaping business