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Here are the 12 strategies our tax experts are sharing with you as part of your free trial:
- Tax Relief For Replacement Of Domestic Items Depending on the nature of the let property, landlords will typically provide domestic items to a greater or lesser degree. It is inevitable that after a period of time, these items will need replacing. When they do, the landlord will be able to claim tax relief, provided that certain conditions are met. Sarah Bradford explores the relief available to landlords when they replace domestic items in properties they let out.
- Property Trading vs Investing: What Do You Want It To Be? Tax advisers may recoil from a title that might be inferred to suggest that a business can be trading or investing depending on the whim of the taxpayer concerned – the correct position is always dependent on the facts, rather than what we might like the facts to have been – but a key factor is the taxpayer’s intentions for the property/ies. In other words, what the taxpayer wants, or plans for. Lee Sharpe looks at the tax implications of property trading versus investing.
- Risk-Free IHT Planning Strategies For The Main Home A person’s home is probably the most difficult asset to plan for, as far as inheritance tax (IHT) is concerned. This is partly because, very often, the home is the most valuable asset in the estate and is also most ‘sensitive’ in the sense of being important to the owner from the point of view of non-financial/tax considerations. Also, the home is one of the most difficult assets to use without incurring the dreaded ‘GROB’ attack. Alan Pink looks at two comparatively risk-free strategies for reducing inheritance tax on the most important asset of most individuals.
- Keep It In The Family! Family Investment Companies It is fairly common for family members to pass investments such as commercial properties down the generations. A family discretionary trust is a popular means of providing for children and remoter generations. However, a family investment company (FIC) is sometimes seen as an alternative ‘wrapper’ in which family members might hold such properties. Mark McLaughlin points out that family members might wish to consider holding commercial properties or other investments within a company ‘wrapper’.
- Proactive Planning To Get Capital Gains Tax Main Residence Relief Most people know that in the straightforward situation where you sell your home, you don’t pay capital gains tax (CGT). But it’s not so well understood that main residence relief can make a huge difference to the CGT you pay in other, much less straightforward situations. Alan Pink looks at planning to reduce capital gains tax on selling a property by occupying it as a residence – and the hurdles that need to be overcome.
- Can A Lettings Company Get Around The ‘Osborne Landlord Tax'
The new mortgage interest relief restriction that came into effect in April 2017 is set to cost buy-to-let (BTL) landlords hundreds of millions of pounds in extra tax each year. The amount that can be claimed has further reduced from April this year and by the time it is fully implemented in 2020/21, it will be generating decent tax revenue for HMRC’s coffers. Lee Sharpe looks at the use of corporate structures in the form of a letting company to avoid these potentially hefty landlord tax increases.
- Interest Relief For Landlords – Where Are We Now? For tax years before 2017/18, obtaining tax relief for interest and financing costs was relatively straightforward – landlords simply deducted them in calculating their rental profits. The beauty of this system was that the landlord received the tax relief at his or her marginal rate of tax. The 2017/18 tax year saw the introduction of the new rules and now we have moved one step further. Sarah Bradford looks at the next phase of the changes to the way in which landlords receive tax relief for interest and the financial impact of the changes.
- HMRC Penalties – Luck Of The Draw? It is not uncommon for disputes between taxpayers and HM Revenue and Customs (HMRC) to result in taxpayer appeals having to be decided (in the first instance) by the First-tier Tribunal (FTT). Mark McLaughlin points out that differences of opinion by tax tribunals can arise in taxpayer disputes with HM Revenue and Customs, resulting in confusion and uncertainty for taxpayers.
- The Home Refurbishment And VAT Trap It can generally be treated as axiomatic that the cost of buying and doing up a house for yourself is nothing to do with tax and one in which HMRC should take no interest. But this is by no means an inviolable rule. Alan Pink looks at some situations where buying a home and reconstructing/refurbishing it is anything but neutral from a VAT point of view.
- Tax Implications Of Putting An Investment Property In Joint Names Before Sale The tax system affords some tax breaks to married couples and civil partners and it is possible, depending on personal circumstances, to use these to mitigate the tax bill arising on the sale of an investment property. Sarah Bradford looks at when it can be beneficial to transfer an interest in an investment property to a spouse or civil partner prior to sale.
- Trusts: Tax Traps To Avoid! The use of trusts is a fairly popular way of passing wealth down generations. Mark McLaughlin highlights a selection of potential tax pitfalls when creating UK trusts to hold investment property.
- Does Incorporation Stack Up For Landlords? It seems you cannot have a discussion involving landlords these days, without somebody mentioning incorporation. With the stricter interest tax relief rules becoming effective from 6th April, it's another timely discussion to be had. Lee Sharpe warns that landlords should not rush into incorporating their businesses without weighing up the ‘pros’ and ‘cons’.
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