Property Company - Limited

marine Registered Posts: 31 💫 🐯 💫

I've had someone approach me about setting up there own property business (buying property doing it up and then selling) and i just wanted some advice as i have never dealt with this issue before.

If he was to set up a limited company do i produce accounts in the normal way but they get taxed under CGT? Am i being thick here just never come across it before.

Also if the company made losses are these allowable for future CGT profits?

Any help would be appreciated - just getting myself in a pickle.

Many thanks



  • PaulPSB
    PaulPSB Registered Posts: 55 💫 🐯 💫
    How the company is taxed will depend on how the property is treated. If the company's business is buying and selling property then the cost of the property, related professional fees etc all become part of the cost of sales against which the future sale of the property will be set to create trading profits/losses.
    If a property is purchased with the intent of retaining for the long term to produce letting income then that property would be capitalised and the rental income taxed accordingly.
    Any sale of this property in future would generate a gain on which Corpn Tax would be charged (using CGT calculations)

    A couple of tips:

    Remember to add all costs relating to a property as closing WIP if the property is not sold at the year end.

    Confirm the intention for the property at the time of purchase and record as a file note/minutes etc

    Be careful with the VAT status of all property purchased

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