Buying the whole freehold - do it as an individual or a company?

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    Buying the whole freehold - do it as an individual or a company?

    My partner and I are the leaseholders in a flat that we live in (in London). The building contains two flats in total - ours and one other. We've now agreed a deal for us to purchase the entirety of the freehold (the other leaseholder is happy for us to do it and does not want to take a share of freehold herself). The current freeholder's solicitor has served section 5a notices on both flats and the other leaseholder has formally stated she's not interested so we're now in a position to finalise things. The questions I have are:
    - Should we purchase the freehold in one of our names OR set up a company to purchase it? We're both keen to go the path that involves the least admin.
    - If we bought it as an individual, then can the reserve fund (around £4k) be held in a personal bank account or does it need to be held in a separate account?
    - If the other leaseholder extends her lease (which she will likely have to do in the next few years) and pays us a premium to do so - what are the tax implications?
    - Is there much involved in doing the accounts for the property? We plan to manage the building ourselves rather than appointing a managing agent. Do the accounts need to be any more than just a simple document that shows money paid in and money paid out for e.g. maintenance work on the building?

    Would be grateful for any advice or if someone knows of a good property accountant then please let me know.


    1. Holding property under company name , requires annual filing of company accounts to Companies House and submitting tax return by the company. Less admin work if property is held under personal name.

    2. The reserve fund is part of the service charges and bank statements may be inspected by other leaseholder , so the fund should be held in a separate account ,

    3. Money received for lease extension is liable for capital gains tax but recipient can claim the annual capital gains personal allowance .

    4. Accountant ( for auditing service charge spending ) is not required for buildings with four or fewer leasehold units. But you should produce an annual summary of the service charge income , expenditure and reserve fund.
    For sale of leasehold flats, the prospective buyer's solicitor will normally ask to see 3 years of service charge records to facilitate buyer's mortgage application.


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