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Ask JGM Your Own Question
JGM
JGM, Solicitor
Category: Scots Law
Satisfied Customers: 12465
Experience:  30 years as a practising solicitor.
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I would just like to run a situation by you for an opinion.

Customer Question

I would just like to run a situation by you for an opinion.
I may have the chance to purchase a propery/land for much less than it potentially could be worth. The current owner has had the property/land valued 'as it stands' - there are no planning permissions in place. However, with planning permission in place the property/land would be worth more.
I would wish to make an offer through a limited company as a binding contract with a long stop date of entry. On the assumption that this offer is accepted, the buying company would apply for appropriate planning consents and if successful would thereby increase the value of the property/land. The company's balance sheet would end up with an asset of property/land with an increased value and with the liability for its purchase still to be paid on the date of entry, leaving the company worth more.
I would then sell the company on hopefully to a willing buyer at a level whereby the buyer would be purchasing an asset for further potential development and value and I would also make a profit on the sale of the company.
I just would like an opinion if this would work from a legal point of view - assuming the current seller accepts my offer and I find a subsequent buyer for the company.
Submitted: 3 months ago.
Category: Scots Law
Expert:  JGM replied 3 months ago.

This would work and is often used as a device to speculate on land without planning permission. You enter into a conditional contract to purchase the land and apply for planning. If this is granted you can sell the company for a higher price as the value of the company will have increased. Happy to discuss further. I hope that helps. Please leave a positive rating so that I am credited for my time.