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Property Tax Insider

Try Property Tax Insider today and receive:

  • 3 FREE Issues - The current April #104 and the previous two issues of March #103 and February #102 (12 tax saving articles)
  • Delivered to your doorstep
    Here are the 12 strategies our tax experts are sharing with you as part of your free trial:
    • Transferring rental income: beware anti-avoidance legislation!
    • Is it possible to give away your income in a property but still retain the capital? Is it possible to transfer some or all of the rental income to another family member – for instance, one who is subject to a lower rate of income tax?

      Lee Sharpe looks at how rental income can be shared out - and points out some traps to be aware of.
    • Minimising your tax on ‘HMO’ conversions
    • HMO stands for house in multiple occupation. We’ve always had these in the UK, but they seem to be a very topicaLeel subject at the moment, no doubt due to our chronic housing shortage. 

      Alan Pink looks at a case study involving the landlord of houses in multiple occupation.
    • Cash basis: relief for capital expenditure
    • The cash basis is a simplified basis of assessment that allows landlords to compute profits by reference to money in and money out, removing the need to match income and expenditure to the period to which it relates, as is necessary under the traditional accruals basis. 

      Sarah Bradford explains how capital expenditure is relieved where landlords prepare accounts using the cash basis.
    • Property tax deductions: don’t miss out!
    • Capital gains tax (CGT) relief is generally available on the disposal of property in respect of improvements, etc., for ‘the amount of any expenditure wholly and exclusively incurred on the asset by him or on his behalf for the purpose of enhancing the value of the assets, being expenditure reflected in the state or nature of the asset at the time of the disposal’ (TCGA 1992, s 38(1)(b)).

      McLaughlin points out that transactions should be structured correctly to avoid the risk of adverse tax consequences.
    • Family property company - passing on the shares 
    • Surprising though this may sound coming from a tax adviser, there’s more to life than tax, and one of the first things that need to be said, in the context of someone planning to give away shares in the family property investment company to other family members, is that you need to think about the consequences of this in the non-tax sphere, as well as in the tax sphere. 

      Alan Pink highlights some planning points and pitfalls when shares in a property investment company are transferred between family members. 
    • Private residence relief: don’t delay! 
    • Most homeowners will be aware that if they buy a house and live in it as their only or main residence throughout their period of ownership, there should be no capital gains tax (CGT) to pay when they sell the property, due to principal private residence (PPR) relief. 

      Mark McLaughlin highlights a potential restriction in capital gains tax private residence relief in common circumstances.
    • Selling land and gardens separately: does the order matter?  
    • Private residence relief acts to exempt any gain arising on the sale of the ‘dwelling house’ from capital gains tax where the dwelling-house has been the taxpayer’s only or main residence throughout the period of ownership.  

      Sarah Bradford explains that when part of the garden is sold separately from the house the order in which they are sold matters. 
    • Coming soon: private residence relief restrictions 
    • The vast majority of readers will know that selling one’s home is tax-free. The capital gains tax (CGT) legislation to give effect to this is commonly referred to as ‘principal private residence (PPR) relief’ and starts at TCGA 1992, s 222.

      Lee Sharpe looks at forthcoming proposed changes to capital gains tax private residence relief for homeowners as announced in Budget 2018.
    • Property repairs vs improvements – why it matters for tax
    • This article looks at the distinction between capital improvements and repairs, and why it is important. 

      Lee Sharpe looks at one of the key tax issues when maintaining or improving rental property.  
    • New kid on the block: property investment LLPs for property investors
    • The myth is still surprisingly widespread that limited liability partnerships (LLPs) are only for accountants and solicitors. 

      They have actually got a much wider potential scope and indeed, the legislation specifically envisages that people will set up LLPs to hold investment portfolios, which of course includes property investment. 

      Alan Pink considers the potential advantages of property investment limited liability partnerships, as opposed to other ways of holding property portfolios.

    • Let’s not get married! 
    • The UK’s tax system features various reliefs, exemptions, and allowances, some of which are seemingly designed to encourage couples to be married (or in a civil partnership). For example, gifts between spouses are normally exempt for inheritance tax (IHT) purposes (although the exemption is subject to a restriction if the recipient spouse is non-UK domiciled).  

      Mark McLaughlin points out that staying single could save inheritance in certain circumstances.
    • Capital gains tax when selling your buy-to-let property 
    • In most cases, no capital gains tax (CGT) is payable when you sell your only or main home, regardless of the size of the gain; the same is not true where an investment property, such as a buy-to-let or a holiday home, is sold or otherwise disposed of realising a gain.

      Sarah Bradford examines the capital gains tax charge that might arise on the disposal by an individual of a buy-to-let property.

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