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Changes to main residence relief

2019-09-02T11:42:40+01:00September 13th, 2019|Categories: Blog, Property|Tags: , , , , , |

In his Budget on 29 October 2018, the Chancellor outlined a number of changes to main residence relief. The changes affect the final period exemption and the availability of lettings relief, which applies where a property which has at some time been an only or main residence, is let out. Main residence exemption No capital gains tax is payable on a gain arising on a property which throughout the period of the taxpayer’s ownership has been his or her only or main residence. If the property has been an only or main residence at some point, the taxable gain [...]

Payment on account of capital gains tax

2019-09-02T11:39:14+01:00September 2nd, 2019|Categories: Blog, Property, Taxation|Tags: , , |

From 6 April 2020 new rules apply to residential property gains liable to capital gains tax and from that date, UK residents will be required to make a return and a payment on account of the capital gains tax due within 30 days of the date of disposal of sale. Where the individual is a non-UK resident, the new rules will apply from 6 April 2019. What disposals are within the new rules? For UK residents, the new rules apply to a disposal on or after 6 April 2020 on which a ‘residential property gain’ arises. Certain disposals are [...]

Expenses that landlords can deduct

2019-08-23T16:24:28+01:00September 2nd, 2019|Categories: Blog, Property|Tags: , , |

Landlords must pay tax on any profit from their property rental business (although income from property of less than £1,000 a year can be ignored). In working out the profits, expenses are deducted from rental income. To ensure that the landlord does not pay more tax than is necessary, it is important to deduct all allowable expenses. Remember, the profit calculation is undertaken for the property income business as a whole, not on a property by property basis. Consequently, it does not matter whether the expenses incurred in relation to an individual property exceed the rental income from that [...]

Furnished holiday lettings – is it worth qualifying?

2019-09-02T11:32:21+01:00July 23rd, 2019|Categories: Articles & Guides, Blog, Property|Tags: , , |

When it comes to taxing rental income, not all properties are equal. Different rules apply to properties which meet the definition of ‘furnished holiday lettings’ (FHLs). While the rules now are not as generous as they once were, they still offer a number of tax advantages over other types of let. Advantages Properties that count as FHLs benefit from: capital gains tax reliefs for traders (business asset rollover relief, entrepreneurs’ relief, relief for business assets and relief for loans for traders); and plant and machinery capital allowances on items such as furniture, fixtures and fittings. In addition, the profits [...]

Stamp duty land tax on non-residential properties

2019-09-02T11:32:13+01:00July 13th, 2019|Categories: Articles & Guides, Blog, Property|Tags: , , , , |

Stamp duty land tax (SDLT) is payable in England and Northern Ireland on the purchase of property over a certain price. It applies equally to residential and non-residential properties, although the rates are different. Stamp duty land tax is devolved with land and buildings transaction tax (LBTT) applying in Scotland and land transaction tax (LTT) applying in Wales. Non-residential property As the name suggests, non-residential property is property other than that which is used as a residence. This includes commercial property, such as shops and office, agricultural land and forests. The non-residential rates of SDLT also apply where six [...]

Annual tax on enveloped dwellings

2019-09-02T11:29:08+01:00July 2nd, 2019|Categories: Articles & Guides, Blog, Property, Taxation|Tags: , , , |

The annual tax on enveloped dwellings (ATED) is a tax that applies, in the main, to companies owning residential property which is valued at more than £500,000. The tax only applies on properties that are classed as ‘dwellings’. This is a property where all or part of it is used as a residence, for example a house or a flat. The ‘dwelling’ also includes the property's gardens or grounds. However, properties such as hotels, guest houses, boarding school accommodation and student halls of residence fall outside the definition of a ‘dwelling’, and thus outside the scope of the tax. [...]

Airbnb-type lets – is rent-a-room relief available?

2019-09-02T11:22:52+01:00May 24th, 2019|Categories: Articles & Guides, Blog, Property|Tags: , , |

Many homeowners have taken advantage of sites such as Airbnb to let out a spare room on a temporary basis or their whole property while they are away. In most cases, as long as the associated conditions are met, hosts can enjoy rental income of up to £7,500 tax-free under the rent-a-room scheme. This continues to be the case as planned legislation to restrict the availability of the relief has not been introduced. Rent-a-room relief Rent-a-room relief is a relief that allows individuals to earn up to £7,500 per year tax-free from letting out furnished accommodation in their own [...]

Claiming a deduction for pre-letting expenses

2019-09-02T11:22:48+01:00May 23rd, 2019|Categories: Articles & Guides, Blog, Property|Tags: , , , |

For tax purposes, a property rental business begins when the first property is let. However, it is likely that the landlord will have incurred some expenses prior to that date in getting the property ready to let and in finding a tenant and agreeing the let. Once the letting has commenced, expenses incurred in relation to that let will be deductible in computing the taxable rental profits, as long as the conditions for deductibility are met (i.e. the expenses are incurred wholly and exclusively for the purposes of the rental business and, subject to the cash basis capital expenditure [...]