For example, if the seller did not collaborate on a Golden Brick agreement or if financing could not be obtained without an early transfer of bricks to the PR. What is “Golden Brick”? It is not a very expensive building material! Instead, Golden Brick refers to the point where the construction of the apartment exceeds the level of the foundations, so the first brick on top of the foundation is the “Golden Brick”. What happens after Golden Brick? When affordable housing units are sold on Golden Brick, it is customary for transaction documents to contain a construction agreement to require the developer to complete construction, so that the affordable housing provider does not remain with a layer of bricks above the foundation of the property. Either the construction contract will be included in the sales contract, or it will be a separate document and, in both cases, it will allow the developer to access the affordable housing units to complete the construction. But HMRC`s law and/or practice could change – who is taking the risk? It will be a matter of negotiation, but the price of the seller who agrees to enter into a gold brick agreement may be that the PC must take the risk of a change in the law and/or an HMRC practice. In practice, this means that before being sold to the PC, the construction work must exceed the level of the foundation (the golden brick” above the level of the foundations). The golden brick can be adapted to evolutions in phases. Is a Golden Brick Arrangement an acceptable tax planning technique? If you make a gold brick deal, the seller will likely need access to any security in exchange to finance the golden bricks. This means that the seller`s lawyer must receive the deposit as an agent, and a tax point is created at first glance at a time when there is only land or an existing building. However, to demonstrate their benign approach to the golden brick, HMRC said you can treat the bond as a partial payment for a partially constructed zero-rating building, provided the contract clearly states that this is what will be handed over when the contract is concluded. The PC will want to control the construction phase before the sale, that is, when the level of the gold brick is reached. This is possible, although the PC is not too close to the seller`s decision-making.
The final decisions have to be made by the seller, but the PC can make a considerable contribution….