Investing as a business

Each year as I go through the tax form (on the net) I'm asked are you operating a business.

When is it worth operating as a business rather than an individual, and do you need to pay all that stamp duty again to transfer your assets to the business.


Kind regards

Flex
 
Hi

No, a business will be decided upon the facts of your transactions. To change to a business would mean buying and selling more IP's and NO there is no stamp duty involved unless you change the ownership of the properties.

Dale
 
Minumum activity for business status?

Hi Dale,

What is the minimum level of activity at which you could reasonably say you are operating a business? Also do you have to be selling the properties or could you just be buying x IP's each year and using the returns as your business income?

Cheers
Chris
 
I think Flex's question is based on his/her assumption that "conducting a business" is the same as "using a structure" (a company, partnership, or a trust). In fact, one can perfectly conduct a business as an individual or be involved in a hobby through their company. (Just elaborating on Dale's post).

Say cheese :p

Lotana
 
Re: Minumum activity for business status?

Originally posted by Chris G
Hi Dale,

What is the minimum level of activity at which you could reasonably say you are operating a business? Also do you have to be selling the properties or could you just be buying x IP's each year and using the returns as your business income?

Cheers
Chris

Hi Chris

There is never a minimum set as the tax office knows that as soon as they do we'll all use such paramaters against them. Sorry.

Dale
 
Thank you for the replies.

Can I assume then, that with multiple properties, if I compare my situation with businuss tax rates verses individual rates, once the business situation is preferable then I can call it a business.

At present I am a non resident for tax purposes, and I am balancing the portfolio to be cash flow positive with negative taxable income. So at present it is probably easier to remain as an individual.

Flex
 
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