Singing Pig

I am currently in full time employment and seeking my first BTS. Should I:-

1. Set up a company.
2. Work as a sole trader
3. Just buy and sell and pay the capital gains tax

Along with the rest of the world, I am looking at minimising my tax liability. As my wife works PT  I know I can use her allowance of CGT as well.

Obviously I would like to sort these things before I purchase any property in case it make things tricky later.

If anyone can recommend an accountant in the Luton area please let me know!

Regards

Tim

You can do (1) or (2) you certainly can’t do (3) as BTS is nothing to do with CGT.

It doesn’t matter whether you are buying and selling wet fish or houses, buying something with the intention of selling on is a trading activity. See various threads on this topic.The only get out maybe if you do only one and thats it. Ever. In this case the intention to trade may be questionable depending on how you have set yourself up and saught deals.

In lue of any other information about you my generic strategy is to buy your first one or two in your own name to see if you can actually make any money out of this and then consider a limited company at a later date. I would suggest the average return is only about £1-2k on the first deal with many people losing once all the costs have been taken into account. Losses can be offset agasint your other income for a sole trader, cant do this with a ltd co.

Regards,

James,

 Thanks for the reply.

The accountant I used previously for my BTL recently suggested that any gains would be subject to capital gains as when I sold my previous BTL I paid CGT. Perhaps its not a bad thing he is retiring.....

I shall investigate further!!

 Thanks

Tim 

BTS or BTL?

I you are selling a BTL then this will indeed be CGT

BTS is quite a different matter.

James,

I did make it clear to my accountant that this was indeed a BTS not BTL.

Come to think of it he completed my SA and said I was owed £130 by IR. Infact I owed them £200. Imagine my joy at not getting a cheque but an invoice! "Oops" he said 

Thanks for your help.

Tim.