PhilTheForce Posted March 20, 2009 Share Posted March 20, 2009 I've recently started working with my Dad on a property he plans to sell (He bought it super cheap). It'll require a lot of hard work but we are both industrious and he stands to make a good profit from it. He has asked if I'd be interested in getting into the next one with him and split the money. I've never been involved with property like this before and just started looking at the figures. Am I right that I will get taxed insanely on this? Capital gains + Income tax etc = about half your profit gone straight off? Makes you want to cry. - You bust your balls to scrape yourself out of the gutter and make something for yourself and get slapped for your troubles? So my other question....Whats the best way to avoid this? (Legally!) Anyone know about registering businesses overseas or offshore accounts? Sorry for being so ignorant but I really want to make a go of this. Thanks Quote Link to comment Share on other sites More sharing options...
Zedrush Posted March 20, 2009 Share Posted March 20, 2009 I've recently started working with my Dad on a property he plans to sell (He bought it super cheap).It'll require a lot of hard work but we are both industrious and he stands to make a good profit from it. He has asked if I'd be interested in getting into the next one with him and split the money. I've never been involved with property like this before and just started looking at the figures. Am I right that I will get taxed insanely on this? Capital gains + Income tax etc = about half your profit gone straight off? Makes you want to cry. - You bust your balls to scrape yourself out of the gutter and make something for yourself and get slapped for your troubles? So my other question....Whats the best way to avoid this? (Legally!) Anyone know about registering businesses overseas or offshore accounts? Sorry for being so ignorant but I really want to make a go of this. Thanks Depends... whos name is the house going in... do you have a friend/relative who is not a home owner that you trust? This is kinda what I got into last year, give me a pm if you want Quote Link to comment Share on other sites More sharing options...
bobby Posted March 20, 2009 Share Posted March 20, 2009 if you register yourself as self employed and just take a stake in your dads house informally...then the profit you make will be subject to income tax after costs.... if you register the house in your names...then it will be subject to cap gains tax...after setting off costs for development. im not too sure on this...but im sure some accountants will advise you better. however...if you re-invest your sales proceeds into another property..then you are effectively not gaining anything in hand...so i dont think it would attract tax until you liquidate your assets. Quote Link to comment Share on other sites More sharing options...
IanS Posted March 20, 2009 Share Posted March 20, 2009 Dont pay income or cap gains tax on a property that is your prime residence. May be worth considering. Quote Link to comment Share on other sites More sharing options...
Martin W Posted March 20, 2009 Share Posted March 20, 2009 Am I right that I will get taxed insanely on this? Capital gains + Income tax etc = about half your profit gone straight off? Makes you want to cry. - You bust your balls to scrape yourself out of the gutter and make something for yourself and get slapped for your troubles? So my other question....Whats the best way to avoid this? (Legally!) Anyone know about registering businesses overseas or offshore accounts? If you do this as a one-off - you'll pay Capital Gains. If it becomes a pattern, the revenue may seek to tax you as a trader (in partnership with your Dad). If this place is somewhere you actually live, you may get away with no Capital Gains on your share of any profit, but if its a hovel, you won't I'm afraid its along time since i practiced as an accountant in the Tax field. Get a decent accountant Quote Link to comment Share on other sites More sharing options...
tmJak Posted March 20, 2009 Share Posted March 20, 2009 Get a decent accountant +1 - They should be able to pay for themselves Quote Link to comment Share on other sites More sharing options...
Stew Posted March 20, 2009 Share Posted March 20, 2009 I have two offshore accounts. Quote Link to comment Share on other sites More sharing options...
Zedrush Posted March 20, 2009 Share Posted March 20, 2009 Dont pay income or cap gains tax on a property that is your prime residence. May be worth considering. very true, hence why if you have a family member whos not a home owner that you trust.... Quote Link to comment Share on other sites More sharing options...
tmJak Posted March 20, 2009 Share Posted March 20, 2009 I have two offshore accounts. Why? What's the benefit? I'd always thought it would be cool to have one, but never understood why. It'd just make me feel like a suave dodgy business type Quote Link to comment Share on other sites More sharing options...
Zedrush Posted March 20, 2009 Share Posted March 20, 2009 I have two offshore accounts. Why? What's the benefit? I'd always thought it would be cool to have one, but never understood why. It'd just make me feel like a suave dodgy business type Id be interested to know this two, minute you bring the money back in youll get taxed surely, unless you spend outside the UK within the country the bank is in? If you dont mind saying Quote Link to comment Share on other sites More sharing options...
Stew Posted March 21, 2009 Share Posted March 21, 2009 No problem saying at all. When I lived in Russia I was paid in US Dollars from various accounts by my company but mostly the Cayman Islands. As I was in the country less than 90 days a year I had 'expatriate' tax status so kept my money away from prying eyes. I still paid VAT (never tried to claim it back even if I could... although don't know if I could!) and voluntary National Insurance. So basically to handle my money I opened a US dollar offshore account and a sterling offshore account so I could transfer money to spend or swap cash depends on the exchange rates etc. Anyway I cleared both when I bought my house! Kept them open though. There were special conditions on opening them though which you have to meet. Quote Link to comment Share on other sites More sharing options...
tmJak Posted March 21, 2009 Share Posted March 21, 2009 No problem saying at all. When I lived in Russia I was paid in US Dollars from various accounts by my company but mostly the Cayman Islands. As I was in the country less than 90 days a year I had 'expatriate' tax status so kept my money away from prying eyes. I still paid VAT (never tried to claim it back even if I could... although don't know if I could!) and voluntary National Insurance. So basically to handle my money I opened a US dollar offshore account and a sterling offshore account so I could transfer money to spend or swap cash depends on the exchange rates etc. Anyway I cleared both when I bought my house! Kept them open though. There were special conditions on opening them though which you have to meet. The only bit of that I understand is the clearing of bank accounts I'm guessing offshore accounts aren't useful unless you're an international type of guy. Quote Link to comment Share on other sites More sharing options...
Stew Posted March 21, 2009 Share Posted March 21, 2009 No not really! :lol: Quote Link to comment Share on other sites More sharing options...
H5 Posted March 21, 2009 Share Posted March 21, 2009 The short answer is it depends on your individual circumstances and tax situation already, and what gains, over what period of time are expected. As people have said, engage an accountant that is a PERSONAL tax specialist. Not corporate tax at this stage. (Coming from an accountant) Quote Link to comment Share on other sites More sharing options...
srobrien Posted March 21, 2009 Share Posted March 21, 2009 I have two offshore accounts. I only have one...my tab at the bond R Quote Link to comment Share on other sites More sharing options...
Stew Posted March 21, 2009 Share Posted March 21, 2009 I have two offshore accounts. I only have one...my tab at the bond R Quote Link to comment Share on other sites More sharing options...
PhilTheForce Posted March 23, 2009 Author Share Posted March 23, 2009 Thanks for the help on this guys. (Espesh Zedrush - thanks for the PM , I await part 2...) I am teh noob when it comes to tax and Property but I can see great potential if you get it right. Interesting what you say about offshore accounts - it seems there's less benefit than I thought... ...Unless you are some kind of shady James Bond bad guy that is! Quote Link to comment Share on other sites More sharing options...
nixy Posted March 23, 2009 Share Posted March 23, 2009 I have some friends who develop property. They always live in one when it is finished for six months before selling it - apparently this avoids all the capital gains etc but obviously you need to check it out. Quote Link to comment Share on other sites More sharing options...
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