Has anyone had any dealings with a company buying/selling land? I have a client who is usually the middle man, receiving agency fees, so his accounts have been quite straight forward. He wants to purchase an "option to buy" on some land, be involved in gaining planning permission, and sell it on. He says the exchange would happen on the same day. He is wondering whether to put these transactions through the agency company, or set up a new company... he asks whether there is any SDLT benefit to this.
I intend on passing him to a higher bod that I work with, as this isn't something I have dealt with before, but I am just curious to the situation and how each option would affect the stamp duty and whether there are any tax advantages.
Its a tall ask, I know.. but any knowledge would be greatly appreciated :)
Hi Michelle,
about ten years ago I had a similar client and I passed this on to a larger local firm as I really didn't fancy getting it all wrong when there was tax on several million pounds. I'm fairly sure there is stamp duty on the option price (but may be wrong) but from memory my client held the option in a company that was already in existence in order to get taper relief I think. On this rationale it may be better for your client to put it through his agency and sell the shares in that company to the future developer in order to claim entrepreneurs relief. I am not absolutely certain this works but certainly worth the client exploring the idea as the tax difference could be a staggeringly high figure.
