Antz99

Thanks @SimonD - I agree. Can you provide any guidance on our best route for this / or whom to speak with? Is it an accountant? It is a developer? I appreciate that we will likely have to pay for this. Thank you

Thanks everyone - this is super helpful. There is also an option of knocking down the existing building and re-building from scratch, including basements. From what we understand the cost of underpinning the existing building will be significant - and it may be cheaper to just knock down the existing (which is currently two old awkwardly shaped flats), potentially retain the facade, and then start afresh, therefore not requiring the same out of underpinning (cost and time). That said, having spoken to a number of accountants yesterday; 1. existing lenders would expect to be paid back before that could happen. 2. If we then transferred into a limited company, we would have to realise gains thus paying CGT 3. Transferring into a Limited company we would have to pay Stamp Duty Though this would then mean the whole works would be 0% VAT, as it's complete new builds. Therefore if the increase in value of existing plus VAT savings is greater than the CGT plus additional stamp duty, then it might well be worth it. The architect we're about to appoint has significant experience in projects similar, so we're aiming on leaning on them a fair bit - but it's the taxation and charges side which as most of you have said is a minefield!! Quickly realising that the profits that we were hoping for, are certainly not likely - @Temp / @newhome especially given that neither my friend / business partner live in the existing property (both rented out) - and we would have no desire to move into the new builds either - especially for 3 years! I think for ease of lending/borrowing it would be better for us to assume that we will build and then immediately sell. @Mr Punter - to your point on being VAT registered - we've been advised by one accountant that if we were to VAT register then we would have to charge VAT on the final sale of the property if it goes to an individual? Is this not the case? Ideally I think we just need to find an accountant who can handle (and understands) all the taxes and fees that may be payable (incl. CGT, VAT, CIL) - who can then look at all the different building options and advise financially where we will be better off; ie. 1. Building just to the side (and basement) 2. Knocking down existing building - and developing whole plot This is hugely insightful, and a great learning - thank you everyone, so far!

Thanks @Mr Punter, We fortunately have finance in place - and because we will continue to hold onto the existing properties, we wanted to try and keep hold of as much control as possible. I also believe that whilst there is greater risk, there's obviously greater reward if we were to develop ourselves - plus also provides us the option of holding on to the new builds and renting - is our financial position allows us to. Do you have any guidance on setting up the limited company etc? Would you recommend speaking to a professional organisation? Thank you, Ant

Very much a newbie, so please go easy on me! I currently own the ground floor flat of an end of terrace property in London. The upstairs flat is owned by a friend of mine. Together we own the freehold on the land. We are about to undertake a personal development project, to extend the terrace and build 2 new 2 bed properties on our existing land. We will then either rent these properties out or sell them for profit - whilst continuing to hold on to our existing properties. From a tax and finance perspective, I have a few questions; - Would setting up a LTD company be beneficial? - If so, if we were to be VAT registered, I understand we could claim back any VAT for architecture and professional services fees? - Though if we were to do so, would we be obliged to charging VAT if we sold the property to an individual? - Does anyone have any recommendations on the best way to reduce CIL, VAT, CGT? Many thanks, Ant