LTD property investment company purchased an end of terrace residential probate property in 2013 for £145k. The property has been let out for just under two years & does need some updating.
Planning permission has just be granted for a very large refurbishment project that would increase the size of the property substantially. This would include a loft conversion, bringing the property out to the back by 3.5metres & bringing the property out to the perimeter of the pavement.
The LTD does have some retained profits but I am also doing some numbers on the injection I will need to provide which is most likely to come from the DLA. In this context I am trying to understand the tax implications of such a large investment. Some of these improvements are certainty capital in nature eg Loft, but i wondered if for example repainting the existing rooms after the works had been completed would be regarded as revenue in nature?
Similarly, I dont think as an investment co I would be able to claim back VAT for the works - is this correct?
Also I have been informed that if the front of the house comes down in normal resi circumstances then the rebuild is VAT free, is this also applicable within an LTD?
If I increase the number of dwellings does this impact the tax implications for the project?
best regards
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