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Conversion process

26 August 2015 / John Ward
Issue: 4515 / Categories: Comment & Analysis , Land & property

Tax implications of converting barns and selling development land.

  • Tax considerations should not outweigh commercial and familial factors.
  • Relevant tax factors will be future plans for the property or the sale proceeds.
  • Consider whether holdover rollover or entrepreneurs’ relief will be available to reduce a capital gain.
  • Reductions in tax relief for interest paid on loans on buy-to-let property will reduce profitability.
  • The VAT on property developments and conversions can be complex.
Whether clients have barns suitable for conversion or land that is suitable for development the considerations can be very similar. Although the tax implications are important they should not dictate the personal and commercial angles otherwise the “tail will be wagging the dog”. The non-tax considerations should be taken into account as a priority.

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