Property Tax Insider Monthly Newsletter

It is difficult enough for landlords to navigate through complex tax legislation and pay the ‘right’ amount of tax without HM Revenue and Customs (HMRC) guidance apparently contradicting itself. But that seems to be the current position. 

Mark McLaughlin looks at interest relief for landlords, and HMRC’s current view on additional funds borrowed against the value of residential lettings.  

This short article will cover the key aspects of ownership and splitting income, in terms of co-owned property. Note in particular that there are special rules for property owned between those in a married couple (or civil partnership) that can complicate matters. Note also that the rules for property ownership differ a little in Scotland, and readers should check that the rules align in the devolved territories of the UK.
 
Lee Sharpe looks at the main rules that govern a taxpayer transferring rental income rights to another.

The ‘related property’ rules are inheritance tax (IHT) anti-avoidance provisions that set out to stop taxpayers taking advantage of Aristotle’s old adage, “The whole is worth more than the sum of the parts”. 

Meg Saksida looks at the special inheritance tax valuation rules for ‘related property’ and its potential effects on married couples (and civil partners).

Business rates are charged on non-domestic properties such as offices, shops, pubs, factories and warehouses. Holiday rental homes are also within the scope of business rates, and this can be a good thing. 

Sarah Bradford advises that you should check your business rates bill to ensure that you are not paying too much.

The Bank of England base rate was a mere 0.1% in September 2021 and stayed there until the end of that year. At the time of writing (late September 2023) it is now 5.25%. Some of us are old enough to remember when mortgage rates reached more than 15% p.a. but I don’t think we have ever seen base rates rise by more than 5,000% in such a relatively short period of time.  

Lee Sharpe considers the tax implications for landlords of buy-to-let properties after interest rates have risen significantly in little over a year.

Some types of income from property are obviously classified as ‘property income’ for the purposes of income tax (e.g., rental income from the letting of a furnished or unfurnished residential or commercial property).  
 
Meg Saksida looks at various categories of income from property and how they are taxed.

Property companies have increased in popularity in recent years in response to a raft of tax changes reducing the attractiveness of an unincorporated property business.  

Sarah Bradford looks at some of the ‘pros’ and ‘cons’ of operating a property business through a limited company. 

Granny flats are popular these days. The term ‘granny flat’ is broadly shorthand for part of a main house (usually an annexe) made into self-contained accommodation suitable for an elderly relative. 

Mark McLaughlin looks at claims for ‘multiple dwellings relief’ from stamp duty land tax when a main residence is bought with a ‘granny flat’.  

Under English property law, there are two ways in which property can be owned jointly – as joint tenants or tenants-in-common. The way in which jointly held property is owned has tax implications. It will also determine what happens when one of the co-owners dies.

Sarah Bradford explains how the way in which joint property is owned can affect the tax outcome.

This article covers aspects of the relatively new regime that requires the owner of UK land to make prompt returns and payment on account of their capital gains tax (CGT) liability, and highlights a quirk of the rules that favours disposals late in the tax year. It focuses primarily on UK tax-residents.

Lee Sharpe looks at the new requirement to notify and pay in advance of the traditional tax return schedule.

In the UK, when taxing property income, profits must be differentiated between property income generated from UK properties and property income generated from properties located outside the UK. Two distinct property businesses will therefore need to be declared for taxing. The UK business will comprise of normal letting and the letting of furnished holiday accommodation sited in the UK; likewise, the foreign letting business will include the same for those properties sited abroad.  

Meg Saksida highlights distinctions in the tax treatment of UK and overseas rental income.

It is generally accepted wisdom that individuals should have a will, so that they can decide what happens to their money and any other assets (e.g., the family home) when they die.

Mark McLaughlin looks at ‘precatory trusts’ and outlines their treatment for inheritance tax purposes.