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Sam
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Category: Tax
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I have purchased a flat off plan 10 months ago and have exchanged

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I have purchased a flat off plan 10 months ago and have exchanged contracts. The building will not be finished for a further 8 months. I paid 10% of the purchase price. If I re assign the contract to another buyer for say, £10,000 more than I paid, then leave the profit plus original deposit with my solicitor, then use the funds to purchase another flat off plan and do exactly the same thing multiple times, when is my profit deemed as being crystallised and what tax would I be due to pay?
If I do not withdraw the funds from the solicitors account, but rather use the funds to purchase a property, are you as a solicitor, duty bound to report such activity and profits to HMRC?
Submitted: 1 year ago.
Category: Tax
Customer: replied 1 year ago.
Relist: I prefer a second opinion.
Expert:  Sam replied 1 year ago.
Hi Thanks for your question A venture such as this due to its frequency would fall as being trade income rather than capital gains.And each tax point would arise when the contract was next assigned regardless of whether you left the profit and original deposit with your solicitor.The solicitor would be duty bound to seek HMRC guidance on such a venture AND also the land registry details would be alerted to HMRC Let me know if I can be of any further assistance Thanks Sam
Customer: replied 1 year ago.

Hi. Thanks for your reply.

Can I ask why the land registry would be informed of such a transaction, as completion is still many months away. They would therefore be informed twice, once when I re-assign the lease and once upon completion. Surely, the land registry data would not benefit from such information, as often these re-assignments can be negative as well as positive.

Expert:  Sam replied 1 year ago.
Hi
Thanks for your question
I would imagine that the land registry would be advised that an interest had been registered in a purchase for either building (or land if build incomplete)
But I am a tax expert rather than a building expert in law.
But certainly your change of position should be alerted to HMRC through the legal position and of course you must advise HMRC yourself anyway as clearly you will be making profits from these transactions
Thanks
Sam
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