New queries, issue 4373

Extractor fan

I was recently explaining the implications of the withdrawal of extra-statutory concession C16 to a client who then suggested the following scenario. It seems too good to be true and I would appreciate readers’ thoughts.

My client together with his three co-shareholder/directors operates a building business through a limited company A Ltd. They purchase run-down properties renovate them and then sell them on doing this to three or four properties a year.

The suggestion was that each future property is purchased by a limited company a new company being used for each property. So B Ltd purchases a property which is renovated by A Ltd.

Once the work is done B Ltd then sells the property to a third party and pays any profit over and above say £35 000 to A Ltd as its...