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Hole Lot Of Trouble - Buy Some Land With No Finances In Place

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THIS enormous hole in the ground is the result of a disastrous land deal made at the height of the property boom - without a penny of funding in place.

Velocity Group planned to develop the plot on Northumberland Road in Crookesmoor, Sheffield, and build a multi-storey car park serving nearby hospitals.

It was so eager to secure the lucrative site it paid a £250,000 non-refundable deposit, before spending £745,000 on enormous excavations and access work.

But the firm neglected to pay £900,000 it owed to more than 30 firms of sub-contractors working on projects across the city including the 445-apartment Velocity Village at West Bar and the landmark Velocity Tower at St Mary’s Gate in Sheffield.

Eventually G&P Building and Plastering of Ecclesall Road, which was owed £192,000, petitioned court, the Official Receiver was called in, and Velocity Group was put into compulsory liquidation.

An investigation by the Insolvency Service found Velocity Group directors Steven Wells and Ian Sivell had signed a £5m deal to buy the Northumberland Road plot, without having finance in place to buy it.

It also revealed the firm had made a string of payments worth £1.1m ‘to the detriment of creditors’ including a £350,000 overpayment to Sivell’s firm, Sivell Engineering, and two payments totalling £50,000 to Wells - who transferred a further £150,000 to his parents.

In the last few weeks Wells, aged 46, of Graham Road, Nether Green, and Sivell, 50, of Burnt Hill Farm, Burnt Hill Lane, Oughtibridge, have accepted nine-year bans for unfit conduct following a three-year investigation.

G&P, which employed up to 50 people, has gone under.

Denise Brown, the Official Receiver for Sheffield, said Velocity Group owed creditors £2.3m, it had spent £1.1m on land it had no prospect of owning, and there was no paperwork for payments totalling £1,154,553.

Nice, I find it amazing that all of this appears to have been legal!

Would the parents transfer be taxable or could it be done in a way it wasn't liable for tax?

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  • 312 Brexit, House prices and Summer 2020

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