Property / 20 posts found
Undeclared offshore assets
From 1 October more than 100 countries, including the UK, will be able to exchange data on financial accounts under the Common Reporting Standard (CRS). CRS data will significantly enhance HMRC’s ability to detect offshore non-compliance and it is in taxpayers’ interests to correct any non-compliance before that data is received. The most common reasons for declaring offshore tax are in relation to foreign property, investment income and moving money into the UK from abroad. According to HMRC, over 17,000 people have already notified the department about tax due from sources of foreign income, such as their holiday homes [...]
October 2017 Q&A
Q. My mother gave my daughter £5,000 on 1 May 2013. She had not made any other gifts in previous years. Unfortunately my mother passed away on 1 September 2017. How much of the gift she gave to her granddaughter is chargeable to inheritance tax? A. Since your mother did not make any other gifts, the gift she made to your daughter will be covered by inheritance tax annual exemptions - £3,000 for 2013/14 plus her unused exemption brought forward from 2012/13 (£3,000 available). Q. I am a self-employed builder. I carried out a job for a customer and invoiced him for £750. [...]
SDLT on second homes
Stamp Duty Land Tax (SDLT) is payable on the purchase of residential property in increasing portions of the property price above £125,000. Current rates of SDLT on individual and additional properties are as follows: Purchase price up to £125,000 - SDLT rate Zero; additional property rate 3% The next £125,000 (portion from £125,001 to £250,000) - SDLT rate 2%; additional property rate 5% The next £675,000 (portion from £250,000 to £925,000) - SDLT rate 5%; additional property rate 8% The next £575,000 (portion from £925,000 to £1.5m) - SDLT rate 10%; additional property rate 13% The remaining amount (portion above [...]
Rent a room scheme
Although Budget 2017 announced that the Government intends to review the rent-a-room scheme, it currently remains a tax-efficient way of letting out a spare room. Broadly, HMRC's rent-a-room scheme is an optional exemption scheme, which allows individuals to receive up to £7,500 of tax-free gross income (income before expenses) from renting out spare rooms in their only or main home. The exemption is halved where the income is shared with a partner or someone else. Broadly, as long as income is below the annual threshold, it does not need to be reported to HMRC. If income exceeds the threshold, it needs to [...]
IHT: main residence nil-rate band
From April 2017, each individual spouse or civil partner will be offered a residence nil rate band (RNRB), which is designed to help pass on a home to 'direct descendants', including children or grandchildren, tax-free after their death. The rules governing the inheritance tax (IHT) nil rate band are complex and it is always recommended that prior professional advice is considered. Phasing in of RNRB The RNRB is being phased in over a four-year period as follows: £100,000 in 2017-2018 £125,000 in 2018-2019 £150,000 in 2019-2020 £175,000 in 2020-2021 Broadly, the new RNRB will be added to the existing £325,000 [...]
Reform of landlords’ taxation?
The government's plans to allow landlords to use the cash basis for tax purposes were confirmed in the 2017 Spring Budget, but although the proposed legislation was included in Finance Bill 2017, it did not appear in the much reduced Finance Act 2017, which received Royal Assent on 27 April 2017. It is likely that the proposals have been temporarily shelved, pending the outcome of the General Election, and are expected to reappear in a second Finance Bill later this year. If the provisions are subsequently enacted, they are expected to apply retrospectively from 6 April 2017, i.e. for the [...]
March 2017 Q&A
Q. Will I have to pay stamp duty land tax on a property I am about to inherit? A. Stamp duty land tax (SDLT) is generally payable on land transactions. There is a land transaction when land passes to a beneficiary under a will, or by virtue of the law on intestacy. However, the legislation governing SDLT (Finance Act 2003, Schedule 3, para. 3A) provides that the acquisition of property by a person: in or towards satisfaction of his entitlement under or in relation to the will of a deceased person, on the intestacy of a deceased person is exempt [...]
February 2017 Q&A
Q. Due to unforeseen circumstances I have recently had to sell my house and down-size to a smaller property. I sold the house for £20,000 less than I paid for it. Can I offset this loss against income from my business and reduce my income tax liability for this year? A. Unfortunately the tax law does not permit you to do this. I am assuming that you are not trading in properties and the house was either your main residence or an investment asset. Losses on the sale of a principal private residence are generally not allowable losses for tax [...]
The Autumn Statement 2016
This is aimed at those who didn't receive our client newsletter - that is still available at http://eepurl.com/cqcb0b. If you do read them both, let me know which version you prefer:-) Summary Chancellor Philip Hammond has delivered his Autumn Statement 2016, which is the first major review of government finances since the EU Referendum, and Mr Hammond's first major statement since taking responsibility for the work of the Treasury in July 2016. As previously speculated, this will be Mr Hammond's only Autumn Statement as it was confirmed that the government is to move to a single major fiscal event each [...]
Restriction of tax relief on finance costs for individual landlords
New provisions will take affect from April 2017, which will see tax relief for finance costs on residential properties being gradually restricted over a period of three years, until, by 2020/21, all financing costs incurred by a landlord will be restricted to the basic rate of income tax. Such finance costs include mortgage interest, interest on loans to buy furnishings and fees incurred when taking out or repaying mortgages or loans. No relief is available for capital repayments of a mortgage or loan. Landlords will no longer be able to deduct all of their finance costs from their property income [...]