It is January 2021, you are employed as a trainee with a leading firm of IFA's (Independent Financial Advisers); the firm deals with the tax affairs of high net worth individuals. Two of the firm's new clients are Mr and Mrs Careful-Planners (CP) who were introduced to your firm by another client. Your clients are deeply averse to any kind of sophisticated investment and have decided that they want to put most of their 3 million inheritance into property. The CP's will resign their full-time jobs in April 2021 and such work the properties will be their sole source of income. Otherwise, Mr CP will practice on his golf handicap in the UK and overseas. Mrs CP intends to concentrate on her garden and some charity work. They have produced a plan for an investment in 15 small properties with an average investment of 100,000 in each property; this cost includes the legal fees due on completion of the property purchase. Typically, the properties need renovation, if the CP's invest 5,000 in each renovation, the property could be rented for 750 per month. If the CP's invest 10,000 in each renovation that property could be resold for a price of 145,000. Mr CP works as a manager for an estate agent, so he has good knowledge of property investment because of this he knows that rental running expenses are 20% of rents. Property taxes and utility bills will be paid by the tenants. To simplify rent collection the CP's will use a managing agent who will take a 10% commission on all rents collected and pay them to the CP's three months in arrears. At present your clients are uncertain as to whether it would be better to keep the property and rent out, or sell. They also don't know which type of investment vehicle they should trade as; either a partnership or limited company. Task A discussion the pros and cons of each available legal structure for tax purposes and a recommendation of which would be best in each circumstance. (Learning Outcome, A, 25%). It is January 2021, you are employed as a trainee with a leading firm of IFA's (Independent Financial Advisers); the firm deals with the tax affairs of high net worth individuals. Two of the firm's new clients are Mr and Mrs Careful-Planners (CP) who were introduced to your firm by another client. Your clients are deeply averse to any kind of sophisticated investment and have decided that they want to put most of their 3 million inheritance into property. The CP's will resign their full-time jobs in April 2021 and such work the properties will be their sole source of income. Otherwise, Mr CP will practice on his golf handicap in the UK and overseas. Mrs CP intends to concentrate on her garden and some charity work. They have produced a plan for an investment in 15 small properties with an average investment of 100,000 in each property; this cost includes the legal fees due on completion of the property purchase. Typically, the properties need renovation, if the CP's invest 5,000 in each renovation, the property could be rented for 750 per month. If the CP's invest 10,000 in each renovation that property could be resold for a price of 145,000. Mr CP works as a manager for an estate agent, so he has good knowledge of property investment because of this he knows that rental running expenses are 20% of rents. Property taxes and utility bills will be paid by the tenants. To simplify rent collection the CP's will use a managing agent who will take a 10% commission on all rents collected and pay them to the CP's three months in arrears. At present your clients are uncertain as to whether it would be better to keep the property and rent out, or sell. They also don't know which type of investment vehicle they should trade as; either a partnership or limited company. Task A discussion the pros and cons of each available legal structure for tax purposes and a recommendation of which would be best in each circumstance. (Learning Outcome, A, 25%)