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My client has traded for just over two years dealing in second-hand vehicles, having acquired the freehold of his site for a little over £300,000. He is now intending to use the site in conjunction with a builder to construct seven dwellings and the current market value of the site is said to be £450,000, planning permission having been granted.
My client has traded for just over two years dealing in second-hand vehicles having acquired the freehold of his site for a little over £300 000. He is now intending to use the site in conjunction with a builder to construct seven dwellings and the current market value of the site is said to be £450 000 planning permission having been granted.
My initial advice was that they set up a limited company to handle the development mainly on the grounds that my client could then sell to the company at market value — obtaining business asset taper relief on the capital gain arising of approximately £150 000 — and crystallise the acquisition cost of the land at £450 000 for the development. The solicitor reminds me that stamp duty land tax of £13 500 would be payable on this transfer. He similarly advises that it would be...
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