The pros and cons of letting furnished holiday accommodation.
When furnished holiday property is let on a commercial basis for short periods, the owner can benefit from certain tax reliefs which wouldn’t otherwise be available to residential landlords, providing certain conditions are met.
However, there are also several disadvantages associated with letting property as holiday accommodation whether or not the furnished holiday letting conditions are met. (more…)
The default basis for landlords’ accounts.
Traders have been able to prepare their accounts using the cash basis since April 2013, as long as they meet certain eligibility conditions.
This option was extended to landlords running unincorporated property businesses from 6 April 2017. (more…)
A brief look at the reliefs that are available for fixtures and fittings on commercial propertyIt has been my experience that the availability of capital allowances is regularly overlooked by commercial property owners; be it those who own commercial property portfolios as investments, or those who own and occupy their own trading premises. (more…)
From 1 April 2018 the Welsh Government will have tax raising powers. Wales is to introduce the Land Transaction Tax which will replace stamp duty land tax and yesterday Finance Secretary, Mark Drakeford announced the rates which will apply in Wales from April 2018.
Whether you own one or 50 let properties, you need to be aware of the tax changes that have already started to take effect – and which will accelerate over the coming years. (more…)
Landlords with one property could be pushed into a higher tax bracket due to changes to mortgage interest relief.
The National Landlords Association (NLA) polled 754 landlords and found that 16% with a single property said they will move into a higher income tax bracket – a 7% increase from Q4 2016.
The Spring Budget was relatively uneventful for those in the property and construction sector. That may come as a welcome relief to many, with previous budgets introducing increased tax liabilities to property investors in particular. (more…)
The Annual Tax on Enveloped Dwellings was brought in on 1 April 2013 and basically applies to companies that own a “high value” residential property, which is currently taken as a property worth in excess of £500k. Initially this test was applied to the value of the property as at 1 April 2012 or on acquisition if later. Property valuations are however, expected to be updated every 5 years, making the next valuation date 1 April 2017. (more…)
Recently there have been a number of important changes to the way in which income from properties are taxed. Predominantly these changes affect owners of residential properties, however, changes to Stamp Duty Land Tax will impact commercial properties.
With respect to residential properties from 6 April 2016, the wear and tear allowance available to landlords of furnished residential lettings, has been abolished and replaced with a deduction for the actual cost of replacing furnishings. The wear and tear allowance was given at 10% of the net rents received in respect of fully furnished let properties. Some landlords who do not spend this amount over the course of a year on actual renewals costs may see an increase in taxable rental profits. (more…)
The recent taxation changes regarding buy-to-let property have not been particularly favourable.
There has been the introduction of the additional 3% Stamp Land Duty Tax on acquiring a second property and the significant reduction in capital gains tax rates announced in the 2016 Budget did not apply to residential property which make both buying and selling a buy-to-let more expensive. In addition, the change over the next four years which will result in mortgage interest relief as an expense being abolished and replaced with a 20% tax credit will start to make the annual return on buy-to-let properties that little bit lower for many and may, in some circumstances, mean that the tax liability on that source of income outweigh the net income itself.
However, it seems that buy-to-let market continues to be a competitive one and many are still favouring investing in bricks and mortar. Lenders have worked to keep the market alive following the former Chancellor’s changes. Five years ago , the average rate for a two year fixed was just over 5% but now there are deals available that provide the same term length but with a rate that is less than 2%. With the recent reduction in Bank of England Base rate to 0.25% these rates may reduce even further. The rates for Companies are not so competitive or products readily available, but with this becoming a vehicle that some investors are considering, this may change too in time.
If you have any queries on this subject, please contact our specialist property & construction team on [email protected]
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