Re: Slightly off topic business question

GT wrote:
"Troy Steadman" <troysteadman@xxxxxxxxxxx> wrote in message
news:1155840465.413843.277930@xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx
GT wrote:
Please forgive me if this post is off-topic, but this is the only
business
related newsgroup that I can find that is not completely filled with spam
and junk!

My partner and I are considering setting up a property-based company, but
I
haven't a clue where to start (setting up the business, not the actual
venture!)

The business is "the actual venture". You have some sort of plan for
what you want to achieve? If you are hoping to latch on to the UK
property boom...a year ago you were too late, now you're just in time
;)

By actual venture, I was referring to the sleeves up, hard physical graft
involved in what we intend to do. By business I was referring to the
paperwork and accountancy/company related activities or which I have very
little knowledge. You are partially right about the property boom, but it
rather depends where you are in the country - I guess you are based in the
south of England somewhere? In our area of scotland the boom was very gentle
when England was soaring, but now this area has started, er.. booming again!
We intend to buy bargain property which requires work, do the work, then
rent them out, not sell on for immediate profit. We don't intend to grow too
large, too soon, but intend this to be a steady and reliable business,
remortgaging property to generate deposits for others. My partner will do
most of the renovation work and I will continue my day job to keep our
household ticking over for now. Ultimately, we will both work full-time in
the business.


I have been through google and once we filter out the junk, we are
left with loads of companies that will charge for the service.

Do you mean Accountancy? Sorting out whether you made a profit, and if
so how much UK tax you have to pay?

Yes. That and the more basic information about how one starts, what options
we have with regard to company status (if that is the work for Ltd,
partnerships etc) and even information on funding. We are both intelligent
educated individuals, but neither of us has any business knowledge or
experience - at this stage we don't even know what has to be done to get our
ball rolling.

The link Peter has given you is almost 100% inappropriate. This is what
I presume you are considering:

1) Create a Ltd Co.
2) Get it to purchase a neglected house.
3) Get it to employ you - its directors - to renovate the house.
4) Let the house.

The company has a period of mortgage paying with no income. Then the
rents eventually pay the mortgage, and by that time house prices will
inevitably have risen (he he he!), so you can remortgage the house and
buy another one.

That is a very complex series of transactions and you will certainly
need a good accountant to get you through it. But here's the way people
normally go about this:

1) Decide to move house to be *genuinely* nearer a good school/elderly
relatives
2) Do house up and *move into it* for a few years.
3) Sell off old house and buy another neglected house a few blocks away
from different school/relatives.

No business, no Capital Gains Tax, no VAT, no PAYE, no accounts.

Somebody in my road did just that;

Bought house March 2001 for £220,000
Sold it in Oct 2004 for £430,000

....after spending £50,000 on the "shell" of an extension which he
wired and decorated himself.

So he made £160,000 in 4 years.

But a £220,000 house in Greater London would have risen to £350,000
anyway:

http://www.nationwide.co.uk/hpi/Default.asp?calculate=true

So he worked 4 years for £30,000 ie £7,500 a year!

.

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