A client purchased a property in about May 2011, let it for a few months, and obtained a planning permission to demolish an existing wooden building and construct a new, larger one. The construction work is well in progress. She intends to sell the developed property and recons she will make a huge profit. She has never been involved in property development prior to this, and owns another property which she lets.
Should the development be regarded as trade? If so, should she register as self-employed and pay Class 2 and 4 NIC? Or would it be liable to income tax under TA 2007 s.756?
Thank you for your views.