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- Property Income - Whose Income Is It Anyway? Married couples (and civil partners) often own assets such as investment properties in joint names. For income tax purposes, those individuals are generally treated as beneficially entitled to income from the investment property in equal shares. Mark McLaughlin highlights a recent tribunal case on the taxation of income from a property jointly-owned by a married couple.
- The Cost Of Changing Your Mind Tax planning for property can be fraught with problems, particularly in relation to the all-important question of whether a property-based activity is trading or investment for tax purposes. Alan Pink considers the tax charges that can arise when a trading property becomes an investment and vice versa.
- Rent-A-Room Relief – A New Test Rent-a-room relief was introduced in 1992 to provide an incentive for people to let out spare rooms in their home; the aim being to increase the availability of low-cost rented accommodation and make it easier for people to move around the country for work. Sarah Bradford explores the new test that will need to be met from 2019/20 onwards in order to qualify for rent-a-room relief.
- What Is A Residential Property? A few weeks ago, HMRC people sat down with representatives from the professions, including the Chartered Institute of Taxation (CIOT), to discuss what is, and what is not, a ‘dwelling’ insofar as stamp duty land tax (SDLT) is concerned. The details have been published on the CIOT’s website. Such things are as rare as hens’ teeth, so it is worth reading for those who have an interest. Lee Sharpe considers what is a dwelling for stamp duty land tax purposes.
- Recent Tax Attacks On Landlords In recent years, landlords have been on the receiving end of a number of unwelcome tax changes, which have imposed a stamp duty land tax (SDLT) supplement on the purchase of second and subsequent residential properties, reduced the rate of relief for interest payments, and created a two-tier system of capital gains tax (CGT) whereby residential property gains suffer a higher rate of tax. Sarah Bradford highlights some tax changes which have had an adverse impact on many landlords.
- How Should You Own Your Business Premises? A very odd thing noticed in practice is that the very important question of how to structure the ownership of one’s business premises is often given little or no attention by taxpayers or their advisers; and yet this decision can have very far-reaching consequences, as we will come to see. Alan Pink looks at the various options for the ownership of business premises – and their very different tax consequences.
- New Cash Basis For Landlords The new cash basis for landlords was introduced in Finance (No 2) Act 2017, and applies automatically to most landlords from 6 April 2017, so will be relevant to 2017/18 tax returns being prepared now; and yes, that does mean that the cash basis applied seven months before the relevant legislation was even enacted. What is worse, if the landlord’s circumstances fit the relevant criteria, it has applied automatically from 6 April 2017 – one has to elect out of the cash basis. Lee Sharpe looks at the new cash basis of assessment, and what it means for landlords.
- The Penalty Escape HMRC ‘Overlooked’ 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 The tax system in the UK might seem harsh when it comes to imposing penalties for non-compliance with statutory obligations. A common example is penalties for the late filing of self-assessment tax returns by individuals. Mark McLaughlin points out that penalties imposed by HMRC for late tax returns should be checked carefully.
- 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.
- 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 very odd thing noticed in practice is that the very important question of how a common oversight by too many landlords is not fully claiming for allowable property expenses. What this results to 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.
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