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Where Taxpayers and Advisers Meet

Is it Trading income or capital gains

Yiannis17
Posts:133
Joined:Wed Aug 06, 2008 3:43 pm
Is it Trading income or capital gains

Postby Yiannis17 » Sun Jun 24, 2018 6:17 pm

Hello

I have a friend who is unhappy with his accountants advise. He inherited a property from the death of his father some 4 years ago. The property was empty up until now and he has recently refurbished it and is considering selling it now instead of renting it out. He has been advised that the Revenue will view this as trading income (even though this is the first property he is selling) and this will be taxed at his higher rate of tax 40% as he is a higher rate tax payer.

I totally disagree. With this view, it means that everyone who inherits a property should be taxed in this way which is absurd in my view as there are no indications towards a trade.

Is anyone aware of any tax cases where the Revenue have taken this approach. All the cases I know are that is is taxed under capital gains tax?

Thank you

wamstax
Posts:2019
Joined:Wed Aug 06, 2008 3:39 pm
Location:Operate Nationally but based in Aberdeen
Contact:

Re: Is it Trading income or capital gains

Postby wamstax » Sun Jun 24, 2018 9:56 pm

A lot would depend on what he did with the property since he inherited it but as the property was inherited and not acquired to refurbish and make a profit from selling there has to be an argument that it is not trading. The method of acquisition would certainly lean towards CGT as opposed to trading and IT.
However you would certainly need to take into account all the pointers towards trading and against it being trading.
regards and hope this helps
http://www.wamstaxltd.com
Operates Nationally with competitive costs
and email and phone contact (mob 07751720507) can be obtained from websites


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