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Where Taxpayers and Advisers Meet

Limited company looking to investment property

dorset1992
Posts:1
Joined:Fri Jun 19, 2020 5:24 pm
Limited company looking to investment property

Postby dorset1992 » Fri Jun 19, 2020 5:28 pm

Hi everyone
I have a client who runs a limited company in the building industry.
They have recently found a property (part residential, part commercial) and had an offer accepted on said property.
They are purchasing the property along with a couple of investors (the limited co will purchase half, investors the other half)
Does anyone reading his have any sort of experience of a similar scenario, and if so, what sort of structure was used following the transaction? I believe the end goal is to renovate the property with a view to rental.

jerome.lane
Posts:237
Joined:Mon Aug 12, 2019 8:41 am
Location:Sandhurst, Berkshire
Contact:

Re: Limited company looking to investment property

Postby jerome.lane » Sat Jun 20, 2020 8:08 am

Hi, I’ve advised on similar transactions a few times. If the property is mixed use, then creating a SPV structure to hold, develop and sell to another connected company is often beneficial for VAT reclaim on work. I would also recommend getting a joint venture agreement in place. This article might be helpful.
https://www.accountingweb.co.uk/tax/hmrc-policy/commercial-to-residential-conversions-tax-hurdles-to-overcome
Jerome Lane
Tax Adviser
Telephone: 07943 005902


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