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The distinction between legal and beneficial ownership of land and buildings (e.g., rental property) is important when it comes to identifying which individual is liable to tax on rental income, or capital gains tax (CGT) on any chargeable gain from a property disposal.

This is because CGT on property gains, and income tax on rental income, is determined by beneficial ownership, rather than legal ownership (NB this article considers the law in England, Wales and Northern Ireland). 

Mark McLaughlin looks at the inheritance tax business property relief status of furnished holiday accommodation.

There are various situations when one person may wish to gift a property to another. This process brings tax implications depending on the circumstances, and whether the property is a main residence or a second property. 

Jennifer Adams looks at tax implications associated with gifting a property.

HMRC has recently published a ‘Spotlight’ (Spotlight 69) drawing attention to a tax avoidance scheme targeted at landlords. 

The scheme involves the transfer of the landlord’s property business to a limited liability partnership (LLP), which is subsequently liquidated, to avoid capital gains tax (CGT) on the eventual disposal to a limited company. However, in HMRC’s opinion, the scheme does not achieve its desired objective and anyone using the scheme will be liable for interest and penalties on the tax they sought to avoid, as well as the tax itself. 

Sarah Bradford highlights a tax avoidance scheme being marketed at landlords and explains why it should be avoided.

The government of the time announced that it would abolish the furnished holiday letting (FHL) regime (sometimes referred to as the furnished holiday accommodation (FHA) regime), with effect from April 2025 (i.e., 1 April 2025 for companies, and 6 April 2025 for income tax – individuals, partnerships, trusts, etc.)

Lee Sharpe looks at how the tax regime for furnished holiday lettings will unwind over 2025.

Property partnerships seem popular these days – typically, as a stepping-stone to greater things. Regular readers will know that I have long criticised HMRC’s published position on whether a property partnership exists, as distinct from simply co-owned property. My argument is that HMRC has drawn up its guidance to set an unreasonably high threshold to ‘make the grade’ as a partnership.

Lee Sharpe looks at whether a joint property letting activity amounts to a partnership, and why it is relevant to landlords.  

Most people do not expect to have to pay capital gains tax (CGT) when they sell their home. Private residence relief (also known as main residence relief or principal private residence relief) normally applies in full when the property has been the taxpayer’s only or main residence throughout the whole period for which they have owned it.  

Sarah Bradford outlines the concept of a ‘main’ residence for capital gains tax purposes. 

The government (HMRC) has become increasingly worried about the volume of small and medium-sized enterprise research and development (R&D) tax credit payments where a company claims to have undertaken eligible R&D activity (and it is important to keep in mind that only certain types of R&D may qualify – there are a lot of criteria).

Lee Sharpe looks at tax aspects of modernising property and the risk of disallowance as improvements that constitute capital expenditure, losing income tax relief in the property business. 

Whether to buy commercial or residential property depends on various factors, not least the more beneficial tax system for commercial lets and whether an individual or a company is purchasing the property. The government wishes to encourage commercial lets and therefore permits a more generous tax regime than residential lettings. 

Jennifer Adams considers some important tax benefits of investing in commercial property.