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In its Property Income manual (at PIM2020), HMRC defines a ‘repair’ as ‘the restoration of an asset by replacing subsidiary parts of the whole asset’. However, in ascertaining whether works undertaken on a property would be classed as a repair, it is important to note that any works resulting in a significant improvement of the property beyond its original condition would not qualify as a repair.
Sarah Bradford using case studies, explores how and when tax relief is available for property repairs.
Property prices are still rising in the UK. Brexit and Covid caused small blips in the market, but the stamp duty land tax holiday coupled with an increased need to work from home led to a 13% rise from mid-2020 to 2021. Taxpayers wishing to sell their homes in these inflationary times may therefore be facing a large gain.
Meg Saksida considers what might be done to retain main residence relief.
Trusts can be created for many reasons, including tax planning. Whatever the reason, the tax implications of creating and running a trust need to be considered in advance.
Mark McLaughlin looks at court applications to rectify trust deeds where trusts give rise to unintended tax consequences.
Given how many tax cases have been heard over the years regarding the relief from capital gains tax (CGT) in respect of one’s only or main residence, it may surprise some readers to find that the provisions involved cover only three principal sections and a handful of pages of the relevant legislation.
Lee Sharpe looks at a recent Scottish capital gains tax (CGT) case involving the disposal of a dwelling within the grounds of a larger main residence.
Many landlords set up companies to own investment properties. There are several possible reasons, such as increased flexibility of company ownership compared with owning interests in properties personally, and the ability to extract profits by dividends.
Mark McLaughlin highlights a potential trap for company owners seeking tax relief for interest on loans to acquire shares or lend funds to property investment companies.
As far as the tax system is concerned, not all types of expenditure are equal; a distinction is drawn between revenue expenditure and capital expenditure. This distinction is important as it determines the extent to which and the way relief for the expenditure, if any, is given.
Sarah Bradford explains the difference between revenue expenditure and capital expenditure and how the tax system provides relief for different types of expenditure.
Generally, if a rental property business ends the year with a loss, there are very limited options for relieving the loss.
Meg Saksida explains the mechanics of claims for rental property losses against general income.
After the recent death of Charlie Watts, reading the case Whyte v HMRC  UKFTT 0270 (TC) put me in mind of one of the Rolling Stones’ best tracks*. The case is 135 pages long, making me wonder if someone had nothing better to do during the pandemic. But apparently the bundle of evidence papers given to the tribunal was around 3,000 pages, so maybe he was just sharing the pain.
Lee Sharpe looks at a tax case that went horribly wrong for the taxpayer and has implications for others who sell garden plots out of their main residence.
This article was prompted by one or two queries that have been raised by regular readers of the Tax Insider magazines. In it, we hope to allay most concerns in relation to property landlord companies, but also to highlight where those concerns may yet be valid, and what to look out for.
Lee Sharpe looks at the effect of the re-introduction of a swathe of ‘old’ legislation to raise corporation tax revenues for a worried chancellorr for property investment companies in particular.
Buying a property to renovate can be appealing for a number of reasons. For example, there is the possibility of making a profit from ‘doing it up’, as well as the chance to put your unique stamp on a property.
Sarah Bradford considers the extent to which tax relief is available for the costs of renovating a property.
Land is an asset that, unlike (say) an antique bureau or a painting, can be sold off in several tranches. Land is, therefore, a perfect asset for those times when a landowner is down on their luck and needs a little cash injection but doesn’t want to sell the whole of their asset.
Meg Saksida outlines a potential deferral opportunity for capital gains tax purposes.
Property transactions do not always go according to plan. For example, suppose a potential buyer pays the seller a deposit for a property. The purchaser has sufficient cash to pay the deposit but is subsequently forced to pull out of the deal as they were unable to obtain the necessary borrowings to meet the full purchase price.
Mark McLaughlin looks at the tax position of forfeited deposits when property deals fall through.
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