My client has a large number of properties, all of which were refurbished and are now rented out.
Some are intended to always be rented out and are held in a 'Property Rental' partnership whilst others, which are intended to be sold at a gain, are held in a 'Property Development' partnership. As such, the expenditure incurred in the property development partnership on legal fees, mortgage interest etc are offset against trading income.
If the properties in the property development partnership are rented out prior to being sold, is it acceptable to treat this income as trading income and will the eventual gain/loss on the disposal still be a charge to income tax, rather than CGT?
Advice much appreciated, thanks in anticipation.