Sole trader/ Part gifted property

jimbis

Hi all, Im a sole trader and hoping by my parents home from them. Part of which will be gifted to me and is under the Cat A threshold. The rest of the balance Myself and partner are applying for a mortgage for.

Am i looking at running into any issues here being sole trader?

If anyone can recommend someone to talk to about it if it is something more complicated then please do.
For the moment i cant ask my accountant for advice

Stratvs

Status as a sole trader would have no relevance to the gift/purchase or CAT.
Your partner, not being related to your parents could face a CAT liability if any thing is gifted to them.

If you are applying for a mortgage then your trading results will be needed to prove income and will have a bearing on mortgage amount granted. So you will need to speak with your accountant and make sure you have sufficient historic records and/or income projections for the lender. They will also require confirmation that your tax affairs are in order.

Calahonda52

Expect the Revenue to look closely at this, especially when you do the CGT return and show an asset purchase at less than market value..
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Also you will need audited accounts.
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If the house is being bought jointly, as Stradivarius, has intimated, there will be CAT issues so you need to think about this

jimbis

Cheers for the replies folks, really appreciated.
It didn't even cross my mind about my partners end of it, so far every speed bump we hit is because of me being self employed so i assumed this would be another.

With regards to audited accounts. I (really herself) does all the book keeping and hands them over to the accountant and he does everything from there. Would that be sufficient provided im all paid up etc.

Calahonda52

jimbis wrote: »

Cheers for the replies folks, really appreciated.
It didn't even cross my mind about my partners end of it, so far every speed bump we hit is because of me being self employed so i assumed this would be another.

With regards to audited accounts. I (really herself) does all the book keeping and hands them over to the accountant and he does everything from there. Would that be sufficient provided im all paid up etc.

Audited accounts are a very specific ask of your accountant, and will cost.
I assume your accountant does your tax work?
I am assuming a small enough business, do you need/have them already them for any existing bank debt for your business?

Stratvs

A sole trader does not require audited accounts neither for Revenue nor for borrowing.

The banks keep referring to ‘audited financial statements’ but what they will actually get from your accountant is the accounts compiled by them from the records you have maintained. P&L, BS, notes and a compilation report signed by them ( which will also state they are unaudited ). This is normal.

Calahonda52

Stratvs wrote: »

A sole trader does not require audited accounts neither for Revenue nor for borrowing.

The banks keep referring to ‘audited financial statements’ but what they will actually get from your accountant is the accounts compiled by them from the records you have maintained. P&L, BS, notes and a compilation report signed by them ( which will also state they are unaudited ). This is normal.

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Agree re Revenue.
Re banks:
I beg to differ here.
Just last week I had two with BOI and they insisted on the opinion statement being provided.
I don't give opinions statements so the work went elsewhere.
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I spent 20 years lending and we always insisted on having the opinion.
It may depend on the lender.

Stratvs

Calahonda52 wrote: »

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Agree re Revenue.
Re banks:
I beg to differ here.
Just last week I had two with BOI and they insisted on the opinion statement being provided.
I don't give opinions statements so the work went elsewhere.
.
I spent 20 years lending and we always insisted on having the opinion.
It may depend on the lender.

+1 re providing opinions. The day I packed in statutory audit work was one of the high points of my career. By all means let that work go ‘up the chain’.

ismat

The only thing you need to be careful about is a gift from your parents to your partner as it will have a small cat threshold. There will not be any cgt as it’s your parents principal private residence. You won’t be making a cgt return as you didn’t dispose of anything. If your a sole trader you can’t have audited accounts anyway. If your Trading through a company and audit exempt the bank would normally accept audit exempt accounts prepared by your accountant.