Your Property Network
First Published: July 2018 | Available in: Property Articles Your Property Network
By specialist property accountant Stephen Fay ACA
Many property investors now operate a limited company, and may not be able to tax-efficiently take all of the company’s profits out, due to their personal income. This article looks at what options are available to company property investors who want to be tax –efficient by retaining spare funds within their company.
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First Published: May 2018 | Available in: Property Articles Your Property Network
By specialist property accountant Stephen Fay ACA
Tax year 2018 sees the start of the new ‘Section 24’ residential mortgage interest relief restrictions, which phase in over tax years 2018 (25%), 2019 (50%), 2020 (75%), 2021 (100%), with only a flat-rate 20% tax credit allowed for mortgage interest / fees paid, regardless of the tax rate of the investor. However, using a ‘simple’ partnership can be useful in allocating property profits in the most beneficial way to ensure that each individual’s tax status is fully-utilised.
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First Published: March 2018 | Available in: Property Articles Your Property Network
By specialist property accountant Stephen Fay ACA
Most property investors are required to file an annual tax return with HMRC, to account for their personal income and pay tax on that income. As this system is on a ‘self-assessment’ basis, and there are over 8 million personal tax returns filed each year, HMRC simply don’t have the resources to check every tax return that is filed – instead, HMRC look at a sample of tax returns each year – this used to be called an ‘investigation’, whereas more recently HMRC call this an ‘Enquiry’ (intended to sound less confrontational!).
This article looks at what a HMRC Enquiry is exactly, and how the risk of an Enquiry can be legitimately minimised.
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First Published: January 2018 | Available in: Property Articles Your Property Network
By specialist property accountant Stephen Fay ACA
Many property investors – whether landlords or developers – have heard of ‘Entrepreneurs Relief’ (ER), but aren’t clear about what it is, and could they benefit from this tax relief. This article explains what ER is, when it can be claimed, and when it may not be beneficial to claim ER.
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First Published: November 2017 | Available in: Property Articles Your Property Network
By specialist property accountant Stephen Fay ACA
Following the introduction of the new ‘Section 24’ mortgage interest relief restrictions, many property investors are now using a company to invest in property. Generally, the most tax-efficient way to fund a property investment company is via a Directors Loan Account – but how do these work & why are they useful?
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First Published: September 2017 | Available in: Property Articles Your Property Network
By specialist property accountant Stephen Fay ACA
Traditionally, residential landlords would claim the ‘Wear and Tear Allowance’ when renting residential property – however this allowance was abolished as of April 2016, and replaced with a ‘furniture replacements’ allowance, which is a significantly less generous tax relief. This article looks at the changes made to this aspect of renting residential property, current position, and how renting furniture and appliances can result in a full tax deduction for the cost.
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First Published: July 2017 | Available in: Property Articles Your Property Network
By specialist property accountant Stephen Fay ACA
‘Section 24’ mortgage interest relief restrictions begin from April 2017, meaning that over the next 4 tax years, mortgage interest will become less and less tax-deductible. Re-mortgaging to reduce mortgage interest relief is an obvious way to reduce the impact of Section 24 – but for many investors, their cash resources are precious and so need to be used wisely – this article explains how strategic re-mortgaging can have a significantly better impact than a more haphazard approach to mortgaging property.
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First Published: May 2017 | Available in: Property Articles Your Property Network
By specialist property accountant Stephen Fay ACA
A common property investment strategy is to buy a property and convert it into a HMO. This can be an expensive strategy however, not helped by the 20% VAT charged by suppliers and builders. However, in many cases it is possible to pay up to 75% less VAT for certain ‘qualifying’ conversions.
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First Published: March 2017 | Available in: Property Articles Your Property Network
By specialist property accountant Stephen Fay ACA
Rental income is not subject to National Insurance, and as entitlement to the State Pension is only possible if National Insurance is paid, this can mean that landlords can miss out on this potentially valuable income stream
This article looks at how State Pension entitlement is achieved, what the State Pension is worth, and how landlords can check their own National Insurance record and make up for any missing entitlement.
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First Published: January 2017 | Available in: Property Articles Your Property Network
By specialist property accountant Stephen Fay ACA
Passing on rental property to children tax-efficiently is one of the most commonly-asked queries that we received, especially from older landlords. However, capital gains tax applies to such transfers, and this can make such transfers unviable – however, there is a simple yet effective method to mitigate this issue, via the use of a trust.
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