Back to Back Sales Examples
Some common examples of Back to Back transactions are as follows:
– Buying land conditional on obtaining planning permission and selling it on once planning permission is obtained.
Back to Back sales are not without risk; one of the primary risks is that the buyer will often be obliged to purchase whether or not he has found an end user to sell to.
Additional risks include the value of the land/property not rising substantially and/or the stamp duty land tax due may be at such a level that it decreases or exceeds the potential profit.
It is extremely important that any proposed Back to Back purchase/sale is properly structured and that these transactions are dealt with by legal representatives experienced in this type of transaction.
Due to the risks involved, it is advisable to seek professional legal advice before entering into an agreement with the intention of immediately selling the property on.
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