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I was 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 fee for the renovation work.
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