Property development

My two business partners and I intend to acquire an old Victorian house in a good residential area. It consists of a basement ground floor first floor and second floor.

There are currently four flats in the property. We are planning to renovate the entire property and then sell all four flats separately.

The property costs £2m and we have obtained quotes from various builders; the renovation of the entire property would cost circa £800 000.

We spoke to our accountant who suggested incorporating a limited company to carry out the project: we would put the property into the company develop it and then sell all four flats.

Once the flats have been sold liquidate the company and after repaying directors’ loans take all the profits out of the company as capital distribution.

However my sister’s accountant claims that carrying out the project...