Property Developers

SarahSSarahS Feels At HomeRegistered Posts: 60
Hi

I've been approached by someone who is about to venture into property development. Recently made redundant (PAYE) and not yet registered as SA or Ltd Co - wants advise about this. He's arranged finance through an IFA by remortgaging his house. Apparently banks won't touch anybody involved with property at the moment so this was his only choice. As he's already personally liable for the mortgage there is no benefit to going Ltd at the moment other than potential tax savings - but he can't even get a bank account as a Ltd Co. property developer apparently.

I realise that as a trade, profits will be taxed by income tax. However, I feel that this is a specialist area and it is likely I will decline to accept the client. Anyone experienced in this area who would care to share some insight?

Thanks,

Sarah

Comments

  • mark130273mark130273 Font Of All Knowledge Registered Posts: 4,234
    SarahS wrote: »
    Hi

    I've been approached by someone who is about to venture into property development. Recently made redundant (PAYE) and not yet registered as SA or Ltd Co - wants advise about this. He's arranged finance through an IFA by remortgaging his house. Apparently banks won't touch anybody involved with property at the moment so this was his only choice. As he's already personally liable for the mortgage there is no benefit to going Ltd at the moment other than potential tax savings - but he can't even get a bank account as a Ltd Co. property developer apparently.

    I realise that as a trade, profits will be taxed by income tax. However, I feel that this is a specialist area and it is likely I will decline to accept the client. Anyone experienced in this area who would care to share some insight?

    Thanks,

    Sarah

    Hiya Sarah , this is an area which i am very interested too, the person i am working for is trying to do a development in liverpool area and he has had so much trouble trying to arrange a property development morgage or loan . one of the banks took 53 weeks to say no then he has already asked for money from a commercial loan company and also other financing possibilities and up to now not one of them have come back with a proper offer. the best offer one came back with was a loan with repayments at nearly 18%...

    He has already asked me to look at the best way of sorting the financial implications of if its better to go into a limited company or not. I have looked into this myself and I can not find a good answer for him but have been asked that a FCAwould be able to give me the advise on the best way of going about this but his fee is going to be £125 per hour???

    But if you can find out the information then i would appreciate an email from yourself on what answer he/she got ! what sort of deal did your client get ??

    many thanks

    Mark
  • slackdaslackda Trusted Regular Registered Posts: 460
    just a thought, as a personal developer not a Ltd company would you get lump with GCT instead of income tax?
  • groundygroundy Trusted Regular Registered Posts: 495
    No CGT is on investments, property developing is a trade if the intention is to but do up and sell on at a profit.
  • slackdaslackda Trusted Regular Registered Posts: 460
    i suppose if you cna show that your self employed and your source of income is that , it makes sense.

    on another note would http://www.businesslink.gov.uk/bdotg/action/detail?type=RESOURCES&itemId=1081839421
    be of any assistant for financing a property developer??
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