Property penalties

We have taken on a client with a large tax problem. The circumstances are strange. Clearly they have had poor advice because many of the problems could have been eliminated with correct procedures at the time.

Two brothers own several companies which in turn own properties that are rented out. The shareholdings are in different percentages but only the two brothers are shareholders.

Over the years the way they have added properties has to a great degree been dictated by their banks. For example land held in one company was developed but transferred to another company after build out because the banks felt more comfortable security wise. Some land was bought personally but developed by one of the companies’ available facilities.

It was then transferred to another company after the building work was completed and it was refinanced.

After examining the historic...