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- Tax Efficient Ways To Renovate And Sell Property Renovating a ‘second-hand’ residential property can be challenging, fun, stressful but financially rewarding if things go to plan! With the continued growth in this property investment strategy. Alan Pink considers two specific strategies for minimising the tax on ‘doing up’ a property for sale.
- A Shorter Payment ‘Window’ For CGT On Residential Property Gains From April 2020, new rules are to be introduced which will require a payment on account (POA) of capital gains tax (CGT) to be made within 30 days of completion where a chargeable gain arises on the disposal of a residential property. The payment will be credited against the individual’s income tax and CGT liability for the year. Sarah Bradford examines proposals to require payment of capital gains tax where a taxable gain arises on the disposal of a residential property within 30 days of completion.
- What Do You ‘Hope’ Your Property Is Worth? It is often necessary to value assets such as a property for inheritance tax (IHT) purposes. For example, if an individual makes a lifetime gift of an investment property in the UK to a discretionary trust, it will normally be necessary to ascertain the market value of the property transferred, as there will be an immediately chargeable transfer on which IHT may be payable. Mark McLaughlin looks at a case on whether ‘hope value’ should be taken into account when valuing a property for inheritance tax purposes.
- Expenses Landlords Typically Forget To Claim A common oversight by too many landlords is not fully claiming for allowable property expenses. What this results in is 'voluntarily' overpayment in taxes! Lee Sharpe looks at some expenses that many landlords do not realise that they can claim and which could make a significant contribution to saved taxes.
- Incorporation Of A Property Business: The $64,000 Question As momentum for incorporating a property business continues to increase, a fundamental question that needs asking is whether the lettings business being incorporated is actually a 'business'? Alan Pink looks at the all-important definition of ‘business’ in relation to the incorporation of a property portfolio in a limited company.
- Holiday Villa Accommodation – Is It ‘Commercial’? Property businesses that provide residential accommodation tend to be profitable in most cases. However, unfortunately, losses sometimes arise. Mark McLaughlin highlights a tax case in which HMRC challenged a loss relief claim in respect of a holiday villa.
- Making The Most Of Lettings Relief Private residence relief is available where a property has been occupied as the taxpayer’s only or main home. Where the property has been the only or main residence throughout the period of ownership, any gain arising on the disposal of the property (by sale or otherwise) is generally free of capital gains tax (CGT). Sarah Bradford explains how lettings relief may reduce the chargeable gain on a property that at some time has been the taxpayer’s only or main residence.
- Marriage Breakdown, Property Assets and Taxes There are a number of income tax and capital gains tax (CGT) implications of divorce, on investment property assets held jointly between spouses/civil partners. Lee Sharpe looks at some implications and provides useful tips and highlights traps to avoid so both parties get the best 'tax result'.
- 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’.
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