Buying Land through a company

A client has two limited companies, a construction company and property company.
Currently the property company is being used to manage rented properties.
They would like to buy a piece of land to develop and want to know:
a) Can they buy it through the construction company as that is where the funds are by adding a new SIC code?
b) Can they buy it through the existing property company?
If they can't do a) they want to know if the construction company can lend the money for the purchase of the land to the property company?

As an aside, has anyone used Sage Final Accounts (Cloud version) for doing property accounts?

Your comments would be much appreciated.


  • Krisso
    Krisso Registered Posts: 124 Dedicated contributor 🦉
    I work for a solicitors and I think A is the best option. Option B would be very messy and complicate the transaction as you would need loan agreements drawn up between the 2 companies, source of funds for both, company and director searches on both and as such increasing costs for the purchase of the land.

    What is happening with the properties on the land once it’s developed? Will these be managed by the property company or are they being sold off?

    There will also be solicitor accounts rules to take into account which may further impede on option B, not that it’s not viable but you will obviously be costed for each companies advise and with conflicts of interest they may need to instruct more than one firm of solicitors as each company is its own entity.
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