Hi all,
I have a residential property company which I use to purchase property through. I actively manage the properties (2 at the minute, soon to be 3). I also work a lot of hours looking for new deals etc.
My question is I am just doing my first year's tax return for the company. When I click through on HMRC it is asking me if the company is an investment company or not
Exert from HMRC website:
"We need to know if the company is:
an insurance company - not including independent insurance brokers
an investment company - the main business is buying assets like shares and financial securities
a credit union - the company operates like a bank and lends money
a commercial property management company - this is different to a flat management or Right to Manage company"
Now does a residential property company fall under 'investment company' above or not? And what is the difference between if I press yes or no. ie what changes in the way the company gets taxed?
I see it as a business as I plan to do a couple of property flips this year along with managing the portfolio but would be good to know how selecting investment vs trading business impacts the tax.
Thanks
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