10:48 AM, 28th January 2019, About 3 years ago 4
Hoping to tap into the tax smarts of this community. I am working on a development deal at the moment where the landowner would like one of the completed units at the end. In general terms, what is likely to be the best way to structure something like that from a tax perspective (from their and our perspective)?
If we agree to give one unit to the landowner as part of the site acquisition deal we would want to pay less for the site given the value of that unit they are getting (and lost sales revenue for us). Would we just pay SDLT on the site acquisition value, or would HMRC expect consideration too for the value of the unit the landowner will be getting, even though it is not even through planning let alone built?
Would the landowner have to pay SDLT once that unit is complete and transferred to their ownership? How would that be calculated if they have been given the unit at cost?
On the other hand, the owner could have a right to purchase a unit from us once the development is complete and just purchase it in normal fashion, but then they will have associated mortgage and transaction costs so in many cases it would seem more beneficial to the landowner (and us) to be given a unit as part of the deal.
Any thoughts on tax implications would be appreciated, along with ideas on how best to structure a deal like this from anyone who has done something similar.
Thanks in advance.