Property Tax Insider Monthly Newsletter

When a couple are looking to invest in property, they will often own the investment property jointly. Where a buy-to-let property is owned jointly, the tax implications depend on the relationship between the parties. If the joint owners are married or in a civil partnership, there are special rules to be aware of. 

Sarah Bradford explores some tax implications of owning property with your spouse or civil partners.

The government’s advice is clear; landlords are not required to stop charging rent during the pandemic. Great efforts and huge financial grants have been made by the government to ensure that all tenants are able to pay their rent, including the furlough scheme for employees and the self-employment income support scheme for those running their own businesses. 

Meg Saksida looks at how landlords might be suffering in 2020/21 and how to deal with the tax effects of it.

The next case study continues the saga of Bill and Benita. It considers the implications of developing a dwelling for re-sale, and what happens if you change your mind part-way through.

In his second article in the series, Lee Sharpe compares two aspiring property developers in case studies.

It is relatively common for certain assets (e.g. a property) to be jointly owned. A property can be owned either as ‘joint tenants’ or ‘tenants-in-common’ (this article applies to property ownership in England and Wales). If a property is bought equally, it will be held as joint tenants unless the owners direct otherwise. 

Mark McLaughlin points out that failing to execute the severance of a joint tenancy properly can have unfortunate consequences.

Matters pension-related are an awful mystery for many people. The complex and specialist rules, which seem to be constantly changing, together with a perceived tendency on the part of Chancellors of the Exchequer to mount ‘raids’ on pension schemes, have all tended to put the average punter off pensions. 

Alan Pink explains how a judicious use of HMRC-approved pensions can be a useful and tax-efficient part of your overall property investment strategy.

This first set of case studies will look at the key considerations when developing a residential property from a bare site. In this article, we shall look at developing residential property from the ground up, and: the role that only or main residence relief (also known as PPR relief) has to play; how VAT can be your friend (but one you still need to keep an eye on); that the construction industry scheme (CIS) will probably apply; planning permission; and interest expenses. 

Lee Sharpe takes a look at property development from scratch; a brand-new residential building.

When setting up a property business, one of the first decisions that has to be made is how the business should be structured. There are various options to consider, including an unincorporated business, a property partnership, a limited company or a limited liability partnership (LLP). As with most things, there are advantages and disadvantages to each. The trick is to find the structure that works best for your particular circumstances. 

Sarah Bradford looks at the advantages and disadvantages of possible structures for rental property businesses.

How much are your assets worth? Some asset valuations (e.g. quoted shares) are relatively straightforward; others might cause disagreements with HM Revenue and Customs (HMRC). 

Mark McLaughlin warns that inaccurate valuations of a property for inheritance tax purposes can have unfortunate consequences. 

Landlords of unincorporated property lettings businesses have had a rough time of it lately. Having only recently got to grips with losing the ‘wear and tear’ allowance and with mortgage interest now only being deductible at basic rates, the Covid-19 pandemic has hit; and with it an immediate loss of earnings, particularly with commercial lettings due to lockdowns; and loss relief only being available to carried forward. 

Meg Saksida explores the incorporation of a rental property business from a tax perspective.

With lettings relief now virtually abolished, what options do landlords have left at their disposal? Many landlords began their climb up the property ladder by renting out their previous main home. Until April 2020, such individuals were able to take advantage of lettings relief (LR) when selling rental properties where they previously resided.

Iain Rankin looks at some of the possibilities for landlords to potentially reduce or defer capital gains tax liabilities.

When looking to set up a property business, most people will weigh up the pros and cons of operating as an unincorporated property business or as a limited company. 

Sarah Bradford highlights some of the advantages and disadvantages of using a property LLP.

The basic rules for allowable expenditure by sole traders and partnerships (or companies) appear straightforward, at least on the face of it. Profits of the trade are calculated in accordance with generally accepted accounting practice, subject to any adjustment required or authorised by law.

Mark McLaughlin highlights a case in which the ‘capital or revenue expenditure’ issue was considered.