Investment flipping with silent partner

[JimD7777777]

Hi all,

I’m a. It of a dummie at this kind of thing, so would appreciate any advice you might offer. Basically, I’m currently scouting for property to buy and flip ( possible build and flip). The finance is being provided by a cash rich , time poor partner. (Business not personal). The profit will be split 50/50. My question is that given my other partner has multiple other revenue e streams, she will be subject to a different Capital Gains rate to me. How do we split the profit derived from this endeavour without her say, for example paying Capital gains, then paying me who would then pay an income tax on top ? That sounds like a double tax to me. By the way I have no other source of income ( currently unemployed). Any help would be appreciated immensely.

[AdamS93]

Sounds like you're in a partnership.

On the basis of facts provided, any profits made will be subject to income tax not CGT.

Best to get some professional advice around the best way to structure everything.

[JimD7777777]

Thanks for taking the time to reply. All advice gratefully received.

[jerome.lane]

Flipping is a trading activity so income tax is more likely to apply. The arrangement you describe is either a joint venture or partnership one. You and your investor can structure projects and/or investment via a corporate entity or even pensions to achieve tax efficiency. It all depends on the long term intentions and how each deal looks. You would benefit from get specific tax advice on each deal as well as legal advice on structuring the deal from a firm like www.navistarlegal.com.

[JimD7777777]

Thank you very much for taking the time to reply. I’ll have a look at the firm you suggested.