Forum

• # 79975
• Thu 23 Feb 2012 08:06 PM

Hi everyone,
 
Could anyone help me how to account buying, improving and then selling a property? This is for a limited company that buys and sells properties. I don't know how to account the purchase of property for resale.

Any help will be apprieciated.

• Kind regards
  
  Tomasz Szlachta  
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• # 80677
• Fri 09 Mar 2012 03:24 PM

It sounds to me as though this company is trading in property.

Therefore, I would treat the buying of the property as purchases together with the renovation costs. At the year end, the company's closing stock is the properties left unsold, together with the renovation costs of those properties.

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• # 80679
• Fri 09 Mar 2012 03:38 PM

Hi,


Thanks for the answer. So all material bought for the renovation will be treated as stock in hand(BS) and purchases(P&L), not as an expense, am I right?

 I have got another question. If somebody who runs grociery shop as limited company, how can he account home office expenses? (i would do a proportion of usage), is that correct. he use his home as an office, trading is run from rented shop. 

• Kind regards
  
  Tomasz Szlachta  
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• # 80721
• Sun 11 Mar 2012 10:15 PM

Hi Tomasz

Yes you are correct on point one.

Point two please see the link below from HMRC re use of home as an office.

http://www.hmrc.gov.uk/manuals/bimmanual/bim47825.htm

kind regards
Stuart

• Forum Moderator, South East & Greater London Regional Chairman
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