I wondered if anyone could offer advice on this situation.
A 2 man ordinary partnership bought and converted a property into 10 flats with the intention of selling them on immediately.Two flats were sold but because of cost over-runs and the property market downturn they made a loss.
The remaining 8 flats remain unsold and have therefore been rented out.
Am I correct in thinking if there is no prospect of selling in the current market they need to be transferred from trading stock to fixed assets.
If so, as the market value is significantly below the cost of purchase and renovation, when this transfer takes place can a loss be claimed and then used against income from other employment income (not related to property development) by one or both of the partners?
Any help or thoughts much appreciated
A 2 man ordinary partnership bought and converted a property into 10 flats with the intention of selling them on immediately.Two flats were sold but because of cost over-runs and the property market downturn they made a loss.
The remaining 8 flats remain unsold and have therefore been rented out.
Am I correct in thinking if there is no prospect of selling in the current market they need to be transferred from trading stock to fixed assets.
If so, as the market value is significantly below the cost of purchase and renovation, when this transfer takes place can a loss be claimed and then used against income from other employment income (not related to property development) by one or both of the partners?
Any help or thoughts much appreciated