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Tax-efficient property development

Shared from Tax Insider: Tax-efficient property development
By Alan Pink, January 2022

Alan Pink suggests a structure for a property development business. 

Let’s assume that your aim in acquiring or developing property is to sell the resultant buildings; so we’re not talking about how to plan for property that you intend to buy and improve in order to let out at an enhanced rent.  

The key point is that profits from selling development or trading properties are chargeable as income and not as capital gains; so that if an individual makes a profit, the rate of tax (including self-employed National Insurance contributions (NICs)) on that profit could be as high as 47%. And this is where the advantage of trading through a limited company seems overwhelming – a ‘no-brainer’.  

Companies pay a flat 19% currently, with a 25% rate on all but small profits promised from 2023, and this is obviously something that we

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