I suspect that the answer is no, but would like confirmation.
Client enters into a JV with a builder, who agrees a purchase price for the property, +2% of the final sale price. So we have an ascertained and an unascertained consideration.
The ascertained consideration would be chargeable, reportable, and payable within 60 days.
In my view, the unascertained consideration becomes chargeable when it is ascertained (i.e. when there is a final contract for sale), but is a disposal of a chose in action rather than a residential property sale, and so is not subject to 60 day reporting/payment.
Any dissenting views?
NB. I'm taking some lead from Marren v Ingles in this.
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I don’t understand the underlying transaction(s) but using the term JV suggests there’s some profit seeking motive and so possibly income tax being in point. Can you describe the arrangement(s) in more detail?
Oddly, the client has just called and clarified, and there is no draft contract yet.
Based on the way it's been described, the developer has offered £750K + 2% of the final selling price. I'm now torn between that 2% being a chose in action, or a slice of the action.
I'm going to hedge my bets, and not commit to income or capital, if we can agree that, if the 2% is capital, it isn't a residential property disposal for 60 day reporting purposes.
EDIT: Nor, indeed, that it will be chargeable at the higher residential rates rather than ordinary CGT rates. Hmmm.
I'm starting to warm to that conclusion.
As I understand it, the scenario is not dissimilar from that described at https://www.gov.uk/hmrc-internal-manuals/residential-property-developer-...
