Can you keep your first time buyers status by buying through a co. you have set up?

[colc1]

I think this question is self-explanatory, I saw it mentioned by some 'expert' in the field a good while back and was wondering if there are any obvious problems that you would come into by doing this?

I cant remember what magazine or paper I read it in now but I definitely recall thats what was recommended to avoid losing first-time buyer status.

Any responses would be greatly appreciated,

C

 

[Brendan Burgess]

Re: Can you keep your first time buyers status by buying through a co. you have set u

Yes, you can, but it's a terrible idea to buy a property through a company.

Search through the Property Investment forum to find the relevant posts.

brendan

 

[ubiquitous]

Re: Can you keep your first time buyers status by buying through a co. you have set u

I saw it mentioned by some 'expert' in the field a good while back

Beware of the advice of "experts" that you might hear on radio or TV. Many "bright ideas" that appear reasonable at first glance can have hidden implications that you won't hear mentioned on air.

 

[eamonn22]

Re: Can you keep your first time buyers status by buying through a co. you have set u

buying property through a company is a nightmare - there are 2 hits for capital gains tax, on the property and on the shares...

 

[ClubMan]

Re: Can you keep your first time buyers status by buying through a co. you have set u

Buying through a company and why it's generally not a great idea is covered in a key post in this forum.

 

[colc1]

Re: Can you keep your first time buyers status by buying through a co. you have set u

Beware of the advice of "experts" that you might hear on radio or TV. Many "bright ideas" that appear reasonable at first glance can have hidden implications that you won't hear mentioned on air.

Haha very true thats why I asked too haha.

buying property through a company is a nightmare - there are 2 hits for capital gains tax, on the property and on the shares...

Sorry for replying again thru this I can never find the exact previous posts I am looking for so quick question. The capital gains tax will only take effect if you are selling the property surely? And on the shares can you explain that to me? Say if there were only two shareholders, e.g. me and ANOTHER?

Thanks,

 

[ajapale]

Re: Can you keep your first time buyers status by buying through a co. you have set u

Haha very true thats why I asked too haha.

Sorry for replying again thru this I can never find the exact previous posts I am looking for so quick question. The capital gains tax will only take effect if you are selling the property surely? And on the shares can you explain that to me? Say if there were only two shareholders, e.g. me and ANOTHER?

Thanks,

colc1,

Your last post lacks a little coherence. Perhaps you might post again explaining/clarifying your question a little better?

aj

 

[SidTheDweeb]

Re: Can you keep your first time buyers status by buying through a co. you have set u

Is it OK to set up an arrangement as follows and do many people do it?


buy a property in your own name
sell it to a company (related party)
engage in an option agreement whereby you can buy the property back from the company at a set price (original sale price) if you wish
you will maintain the property at a cost that is regarded to be the equivalent of the market rent, you only pay the company a fee if the "maintenance" charge happens to be less that the "market" rent.

Is it likely that there would be wording in the option agreement that if the value of the property declines the company may pursue the original seller?

What would be the benefit of entering an agreement like this?

 

[ubiquitous]

Re: Can you keep your first time buyers status by buying through a co. you have set u

I
What would be the benefit of entering an agreement like this?

Probably zero. It would be difficult to sustain as a bona-fide commercial arrangement if/when challenged by Revenue. On that basis, Revenue can readily dismiss it as having no legal effect and disallow any tax advantage.