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F. Naz
F. Naz, Chartered Accountant
Category: Business
Satisfied Customers: 1064
Experience:  Doing Chartered Accountancy
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Limited company incorporated in Scotland with the following

Customer Question

Good Morning,Limited company incorporated in Scotland with the following business activities:
Primary - Other letting & operating of own or lease real estate
Other - Accounting/audit servicesThe director introduced a property (in Scotland) in 2015 and has been renovating it ready to be letout. The company is the legal owner, but the property was purchased in full by the director. The value of the property will be held in the directors loan account. (they have currently set it up as £130k for one share but I have advised we process a special resolution to move this to DLA).
The sole director of the company also worked through a recruitment company for around 6 months doing accountancy work. The contract was in the name of the limited company, not the director.The fees for the accountancy work has been paid gross into the clients business account and they have been using this revenue to pay for the refurb of the property.The company was set up in 2015 and the year end is 30th June 2016.So far no rental income has been received only expenses. Can the income from the short contract be used to offset the losses that will undoubtedly arise from the refurb of the property, or can the losses generated only be carry forward to next years profits and corp tax will be due on the income from the short service contract?Any advice that you can offer regarding this whole scenario would be really helpful. I think I know the answers but I am doubting myself so would like some reassurance.
Many thanks
Submitted: 9 months ago.
Category: Business
Expert:  F. Naz replied 9 months ago.

Hello

Please mention the deadline and is this your real life scenario or some school assignment?

Expert:  F. Naz replied 9 months ago.

Hello

Please mention the deadline and is this your real life scenario or some school assignment?

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