Everyone that owns property will be exposed to Property Tax in some form or another. If you rent out the property, either as a residential property, furnished holiday let or as commercial property; or when you sell it – you have to declare this to the Inland Revenue and Customs and may be liable to taxes.
What tax you pay is dependent on many factors, so if you have property talk to TaxAgility and we can help you understand your actual or potential tax liability.
Tax Planning, when you own a property, is extremely important.
Did you know:
• If you have a rental property – that you need to keep your records for 5 years and 10 months from the end of the tax year in which the income was declared;
• If your gross receipts of rental income are less than £15,000 a year, you can account for your rental property trade on the cash basis;
• Costs of a capital nature cannot be deducted against rental income but can be used to reduce your capital gain when selling the property – ask us about this and how it can affect your property profits and losses and capital gains;
• You may be entitled to a wear and tear allowance each year in your property rental business, but this can only be used if you have a fully furnished property;
• From April 2013 the renewals allowance will no longer be available for furniture, so the only allowance that can be claimed is that of wear and tear;
• From the tax year of 2011-12 – no longer can losses from the furnished holiday let be offset against other income – it can only be carried forward – call on us to help you with your furnished holiday let disclosure;
• That you can transfer your property to your spouse without paying Capital Gains Tax (but be aware, that when your spouse sells the property, the gain will be computed on the original value at purchase, not the value at the date of transfer) – we can assist with this calculation;
• A capital gain is calculated at the value of the date of exchange, not the date of completion;
• If you ever lived in the property that you are selling, there are certain relief’s available that decrease and may even completely negate any capital gain;
• Gift relief may be available in certain circumstances;
• That your will and Inheritance Tax Planning need to be reviewed on a regular basis;
• That you need to consider the implications of buying a property in your personal hands or through a limited company. There are positive and negative implications to both that need to be considered to decide which is best for you. At TaxAgility we can help you make an informed decision.
You and your partner are entitled to various tax free allowances – are you using these allowances for Income Tax, Capital Gains Tax and Stamp Duty Land Tax effectively? Tax planning can help you save money.
Call TaxAgility if you wish to discuss your property and the tax implications of owning property.
This blog is a general summary. It should not replace professional advice tailored to your specific circumstances.