I am a sole trader general builder and have recently renovated and sold a property which was purchased in joint names with my wife. Should it be determined that this property development be treated as a trade rather than a capital investment? As this was a joint project with my wife, could/should I treat it as a separate new partnership trade, or as part of my continuing sole trader business, with 50% allocated to my wife? We are currently renovating a second property. 

Arthur Weller replies:
If you are a builder and have renovated and sold a property, most likely HMRC will say that the profits are subject to income tax and not capital gains tax. See HMRC’s Business Income manual at www.gov.uk/hmrc-internal-manuals/business-income-manual/bim51620. If this is a genuine partnership between you and your wife, then it will be taxed separately from your sole trade, see HMRC’s guidance at bim82015 (and pages bim82001, 82005 and 82010 for the definition of a partnership, and the necessity for a partnership to have an agreement to share net profits and losses)