Hi, I have a question about structure of ownership.
Let's say you have a company that owns 2 rental properties and will own them for 10+ years.
If the same company buys another rental property with the intention to hold on to it for at least 5 years, but then after 1 year gets an excellent offer to purchase the property from the tenants living in it, then I'm assuming the brightline test means that tax would have to be paid on that sale.
But, does that then mean that the company from that point onwards would be regarded as 'trading in property' and have to pay tax on every sale from that point onwards?
I ask because my lawyer has no idea.
Let's say you have a company that owns 2 rental properties and will own them for 10+ years.
If the same company buys another rental property with the intention to hold on to it for at least 5 years, but then after 1 year gets an excellent offer to purchase the property from the tenants living in it, then I'm assuming the brightline test means that tax would have to be paid on that sale.
But, does that then mean that the company from that point onwards would be regarded as 'trading in property' and have to pay tax on every sale from that point onwards?
I ask because my lawyer has no idea.
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