Property Tax Insider Monthly Newsletter

There are complications to the Form 17 procedure for married couples and civil partnerships. The regime applies only to legally married couples and civil partnerships, where the spouses, etc., are living together as a couple during the tax year (ITA 2007, ss 836, 837). 

Lee Sharpe looks at some of the intricacies of Form 17 for spouses and civil partners.

Changes in the ways that unincorporated landlords receive relief for interest costs in relation to residential lettings have led to an increase in corporate landlords. There are some tax advantages:  interest and finance costs incurred in relation to residential lets are deductible in full in computing the property company’s profits for corporation tax purposes; and the highest rate of corporation tax at 25% is significantly lower than the highest rate of income tax at 45%. 
 
Sarah Bradford explores how profits can be extracted from a property company for personal use in a tax-efficient manner.

Think back to 2013; David Cameron was still Prime Minister, HMV had collapsed, Andy Murray won Wimbledon, and HMRC announced the start of the let property campaign (LPC).  

Jennifer Adams considers whether the ‘Let property campaign’ has been a success for HMRC and asks whether it will still be around ten years from now. 

For capital gains tax (CGT) purposes, in determining a gain (or loss) when an individual disposes of an asset such as a buy-to-let investment property, certain incidental costs can normally be deducted in calculating the taxable gain (or allowable loss), in addition to the cost of acquiring the property.  

Mark McLaughlin looks at the deduction of costs for capital gains tax purposes on the disposal of an investment property by an individual. 

The theory behind partnership taxation is logical and relatively straightforward. But partnerships themselves can be quite complex and mutable animals, so those initially simple rules sometimes become quite contorted as new partners join, others leave and sharing ratios change over time.

Lee Sharpe looks at the special rules for property assets within a partnership.

In most cases, assets are legally and beneficially owned by the same person (NB this article considers the law in England, Wales, and Northern Ireland). However, this is not always the case.

Mark McLaughlin looks at the distinction between assets which are legally or beneficially owned, and the implications for capital gains tax purposes.

Not all landlords let property to make a profit, be that an income profit or capital gain. There are various circumstances in which a landlord may let at a rate below the current market rate (termed an 'uncommercial' rent) where, for example, a landlord who has otherwise empty properties rents to family and friends at a low rent or even rent-free. The definition of an ‘uncommercial’ let is a property rented for less than the market rate of a comparable property in the neighbourhood.

Jennifer Adams considers the tax implications for landlords when renting out a property at a reduced rent or rent-free.

The property allowance is something of an easement in that it removes the need for individuals to report small amounts of income from property – and saves HMRC from having to collect small amounts of tax where the costs of collection outweigh the tax collected. 
 
Sarah Bradford explains the nature of the property allowance and explores the limitations on its use.

Property partnerships seem popular these days – typically, as a stepping-stone to greater things. Regular readers will know that I have long criticised HMRC’s published position on whether a property partnership exists, as distinct from simply co-owned property. My argument is that HMRC has drawn up its guidance to set an unreasonably high threshold to ‘make the grade’ as a partnership.

Lee Sharpe looks at whether a joint property letting activity amounts to a partnership, and why it is relevant to landlords.  

It is not uncommon for an elderly parent (usually widowed) to make a lifetime gift of their home to adult offspring. This may be done for non-tax reasons (e.g., in the hope of sheltering against future care home costs; specialist advice would be needed on this point), or to reduce exposure to inheritance tax (IHT) on their death estate.

Meg Saksida explains the circumstances where this valuable tax relief is available and beneficial. 

Making tax digital for income tax self-assessment (MTD for ITSA) is part of the government’s tax administration strategy.  

Under MTD for ITSA, businesses and landlords will be required to maintain digital records and use compatible software to submit updates to HMRC each quarter.

Sarah Bradford explains how making tax digital for income tax self-assessment will affect landlords and outlines some simplifications announced at the time of Autumn Statement 2023.

Principal private residence (PPR) relief broadly applies to gains accruing to individuals on the disposal of (or of an interest in) all or part of a dwelling house which has (or has at any time during their period of ownership) been their only or main residence.
 
Mark McLaughlin looks at the capital gains tax principal private residence relief position if an old dwelling is demolished and a new one is built in its place.