With the proposed changes to the relief for mortgage interest in the Summer 2015 Budget many current and new property investors are looking at property flips as a way to make money from property. If you are considering this then there are many issues which you need to consider including:
- Property flips makes you a property developer. You may not think so but that is the view of both the Courts and HM Revenue & Customs.
- You will need to consider whether you should trade as a sole trader, partnership or limited company. The answer to this depends upon your attitude to risk, current tax position and business strategy
- If you will use sub-contractors (electricians, plumbers etc) then you will need to register with HM Revenue & Customs for the Construction Industry Scheme.
- The profits of property flips are taxed as income not capital gains.
Waking up and saying ‘I will start buying and doing up properties to make money’ may seem like a good idea but as shown above there are a lot of pitfalls to avoid. Check out our other blogs or for more information on this or our other services please visit our website at www.reynoldsandco.co.uk or contact Nigel Reynolds at: Email: firstname.lastname@example.org Telephone: 0333 210 1717