Property developments - auctions

[tywalia]

My wife and I are involved in buying properties off auction, renovating them and selling on for a gain (no other income). These properties are bought in both our names. Have several queries:

1. Are all the costs relating to the renovations deductable (ie installation of kitchens, labour, car costs, office costs)?
2. Are the gains considered capital and if so can we benefit from capital gains alllowances?
3. Are there any roll over reliefs as profits from porperties are put into new properties or do we need to be a business?
4. Is it wise to set up a ltd company for this activity? see question 3

Thanks for your help

Confused and getting a lot of grief from the wife!!!

[Ian McTernan CTA]

This is a trade, so gains are income. All reasonable costs are deductable, including interest on loans to finance purchase, etc.

No roll-over relief as it is income and not gain.

You should have registered as self employed within three months of commencement of trade, and will be fined £100 each if you are late.

Question 4. - there is no easy answer to this, depends on all your circumstances.

You need to seek professional help and appoint someone to advise you.

Ian McTernan CTA
McTernan Associates Ltd
Chartered Tax Advisers
ian@imcternan.com

[accountant@uktaxshop]

One thing to add to what Ian has to say is that it might be worth you look at the "tax doctor" section on this website regarding incorporation

It is question Q3 and is a good background guide to the implications if you want to read up before looking around for some advice.

Regards

James Smith
Chartered Accountant
www.uktaxshop.co.uk
01284 764436