Property / 20 posts found
Lifetime ISA guidance updated
HM Treasury has updated its factsheet on the new Lifetime Individual Savings Account (ISA), which are expected to launch in April 2017. Key features of the new ISA include: Accounts may be opened by investors aged between 18 and 40. Savings invested in the account before age 50 will attract a government bonus of 25%. A maximum of £4,000 may be saved each year on which the 25% bonus will be paid. This equates to a maximum bonus of £1,000 a year. Some or all of the money can be used to buy a first home, or it can be [...]
July 2016 Q&A
Q1. My mother died last year and left my brother and me a commercial business unit. Probate is nearly complete now. If we sell the property in the future, what are the capital gains tax implications on the sale? A: I presume that you and your brother are inheriting equal shares in the property. Your acquisition value, for future capital gains tax computation purposes, is the market value at the date of death - known as the 'probate value'. Capital gains tax will be calculated under the normal rules on any increase in value from that date. Q2. I have [...]
June 2016 Q&A
Q I am thinking of purchasing a new house that I will use as my main residence, but I will still own other properties. Will I be liable to the new 3% stamp duty land tax (SDLT) change? A: HMRC guidance on the new higher rates of SDLT for purchase of additional residential properties explains that if a previous main residence is replaced within three years, then you will not be liable to the additional 3% SDLT charge, even though you own other residential properties. Q I commenced trading as a service provider on 1 September 2015 and now wish [...]
May 2016 Q&A
Q1. How do I work out my share of a capital gain? I owned a quarter share in a property that was sold in 2015. It was not my main residence at any time during my period of ownership. I am trying to work out my share of the capital gain arising on the property. Do I simply divide the purchase price, sale price, and any improvement costs by four to work out how much tax I will have to pay? A: Assuming that all the improvement costs and the sale proceeds relating to this property were 25% your responsibility, [...]
Guidance on SDLT Budget reforms
Following announcements made in the 2016 Budget on 16 March, HMRC have published further guidance on the changes that are being made to stamp duty land tax (SDLT), and how they affect non-residential property transactions from 17 March 2016. The changes mean that: on or after 17 March 2016, the SDLT rate for non-residential freehold and leasehold transactions will only be payable on the portion of the consideration which falls within each band (rather than tax being due at one rate on the entire value); SDLT on the rental element of non-residential leasehold transactions is already taxable on the portion [...]
April 2016 Q&A
Q. Can I transfer my personal allowance? I work part time and don't earn enough to pay tax, but my wife earns £25,000 a year from her full time job. I have been told that I can transfer some of my personal allowances to her so she can save some income tax. Is this true? A Claiming the marriage allowance can save married couples or civil partners up to £220 in 2016/17, but many couples have not claimed it yet. The allowance was introduced from 6 April 2015, and enables married couples or civil partners to transfer £1,100 of personal [...]
Landlords’ replacement wear and tear allowance
Capital allowances are not available for expenditure on furniture and furnishings for use in dwelling houses. However, until 5 April 2016 (1 April 2016 for corporation tax) a deduction for wear and tear may be claimed (known as a 'wear and tear allowance election'), equal to 10% of the 'net rents' from furnished lettings (ie after deducting payments that would normally be borne by the tenant, such as water rates). In addition, a deduction may be claimed for replacing fixtures that are an integral part of a building (eg central heating systems), but excluding additional expenditure on 'improved' versions of [...]
Stamp Duty Land Tax (SDLT) on additional properties
Proposals to bring in higher rates of stamp duty land tax (SDLT) on purchases of additional residential properties are expected to be finalised in time for the forthcoming Spring Budget on 16 March 2016. SDLT is paid on the purchase of residential property in increasing portions of the property price above £125,000. Current rates are as follows: SDLT for a property with purchase price of up to £125,000 is currently 0%; the proposed additional properties rate in this band is 3%. SDLT on the next £125,000 of the purchase price is currently 2%; the proposed additional properties rate in this [...]
January 2016 Q&A
Q. What is our IHT position following a change of ownership? In 2014, my partner and I changed the ownership status of our house from joint tenants to tenants-in-common. At that time, my share of the equity was reduced from 50% to 25% and my partner's was, in turn, increased to 75%. Does this count as a lifetime gift for inheritance tax purposes (IHT)? A If you are married to you partner (spouse or civil partners), then the change will not count as a lifetime gift (a potentially exempt transfer (PET)) as it will be treated as an inter-spouse/civil partner [...]
December 2015 Q&A
Q. Can I claim for the time I spend repairing my rental property? I own three rental properties and spend a considerable amount of time each year undertaking various necessary repairs. Can I pay myself say, an hourly rate, for the time I spend on the properties and claim a corresponding deduction in my accounts? A Any amounts taken from the property rental business will simply be viewed as a withdrawal of profits from the business and taxed accordingly. The HMRC Property Income Manual states 'A landlord can't deduct anything for the time they spend themselves working in their own [...]