Neil Patterson

A Small Sites Metric (SSM) assessment for a single parking bay on an already partly paved area is a perfect example of bureaucracy at its worst!

Since it’s a biodiversity metric, what they want is an assessment under Defra’s Biodiversity Net Gain (BNG) policy—even if the actual ecological impact is negligible. The Small Sites Metric is specifically designed for developments like yours, but annoyingly, it still requires a qualified ecologist or assessor to complete it:

A consultant familiar with the Small Sites Metric (SSM) — ideally someone with experience in small-scale urban developments.

Basic site information — photos, address, a description of the site and the proposed works.

No site visit needed as you said, many assessors are happy to work remotely for minor jobs like this, especially if it's just converting a dead lawn into paving.

Look for independent ecological consultants who specialise in small or domestic projects. Larger consultancies may charge more and insist on unnecessary extras.

Try contacting:

Local planning consultants or architects—they often work with ecologists.

Your county ecological records centre (LERC)—they may have a list of local qualified assessors.

Check CIEEM’s professional directory: https://cieem.net/ — search for ecologists with “Biodiversity Net Gain” experience.

What to ask:

Are you familiar with the Small Sites Metric (v2)?

Can you complete a remote desktop assessment based on photos and site info?

What’s the cost and turnaround?... Read More

This is a really great, clear summary — and you’ve already done half the accountant’s job by laying out the timeline so precisely. You're right to pause here before rushing to market, because the CGT calculation for a property like this, with such a complex history, isn’t quite as straightforward as the GOV.UK calculator makes it seem.

1. Single Title, Later Split:

Because the entire property has always remained under one title (even after conversion into two flats), HMRC will treat the building as a single capital asset until the first part is sold. When you now sell the Ground Floor Flat, you’ll need to apportion the original base cost (£45,000) and any qualifying capital improvements between the two flats. This is usually done on a reasonable basis — most commonly market value at the time of split or floor area proportions.

2. CGT Calculation Framework:

When you sell the Ground Floor Flat, the formula would be:

Final Sale Price
- Proportion of Original Purchase Price (£45k)
- Proportion of any capital improvements (extensions, conversions, major works)
- Selling costs (legal, estate agent, etc.)
= Chargeable Gain

Private Residence Relief (PRR) can also apply for the years you lived there — but only for the portion of the property that was your main residence, which for the Ground Floor Flat would be... never, since you lived in the first floor maisonette post-split.

3. What Counts as ‘Capital Improvement’?

You've done a huge amount of work over the years, but only certain expenses count toward reducing CGT. Here’s a guide:
Work Done Qualifies? Notes
1989 Full rebuild & utilities ✅ Yes Essential structural work: included.
2008 Conversion into two flats ✅ Yes Structural alteration to create new asset.
Kitchens, bathrooms, soundproofing ✅ Mostly If it’s capital in nature (not maintenance).
General maintenance & repairs ❌ No Revenue expense — not deductible for CGT.

4. Apportioning the Original £45k & Improvement Costs:

You’ll need to determine:

What percentage of the property’s value is represented by the Ground Floor Flat (usually based on either floor area or professional valuation at the time of sale or split).

Apply the same percentage to the purchase price and the capital improvements.

So let’s say the Ground Floor Flat makes up 50% of the property’s value:

Purchase cost = £22,500.

If you spent (hypothetically) £80,000 on the rebuild + £40,000 on the 2008 split and improvements, the same 50% rule applies — so £60,000 could be added to the Ground Floor Flat’s base cost.

If the split wasn’t valued formally back in 2008, you could get a surveyor to do a retrospective valuation or agree a reasonable split with HMRC based on square footage and amenities.

5. Purchase Date & CGT Calculator:

For the GOV.UK calculator:

The purchase date is 1989, because the flat was part of the original purchase.

The cost base is the apportioned share of the £45k plus qualifying capital improvements.

6. Private Residence Relief (PRR):

Since the Ground Floor Flat was rented out from 2009 onwards and never occupied as your principal home, no PRR will apply to this part — but when you eventually sell the First Floor Maisonette, PRR will help reduce that gain, since you lived in it from 2009 to 2014.

7. Recommended Steps:

Get a current valuation for the whole building and the Ground Floor Flat individually (your solicitor will also want this for the title split).

Estimate or dig out records of your capital expenditure (rebuild + split + improvements).

Apportion the base costs (purchase price + qualifying improvements) based on fair methodology.

Calculate selling costs (solicitor, estate agent, EPC, etc.) — these are deductible too.

Use the apportionment in the GOV.UK CGT calculator to get a sense of the liability.

If the figures are substantial, it’s well worth running them past an accountant or tax adviser for confirmation.... Read More

Hi John,

Was the agent a member of a redress scheme or had client money protection insurance?

Letting agents must by law belong to one of these government-approved redress schemes:

The Property Ombudsman (TPO)

Handles disputes between landlords/tenants and agents.

Offers binding resolutions.

Property Redress Scheme (PRS)

An alternative to TPO, also approved by the government.

Offers similar dispute resolution services.

Client Money Protection (CMP) Schemes

Agents handling client money must belong to a CMP scheme. The main ones are:

Propertymark Client Money Protection

Client Money Protect

Money Shield

UKALA Client Money Protection

These schemes protect landlord and tenant funds if the agent goes bust or misappropriates the money.

Professional Membership Bodies

While not mandatory, many reputable agents join these for credibility and guidance:

ARLA Propertymark (Association of Residential Letting Agents)

Offers qualifications, a code of conduct, and ongoing training.

UKALA (UK Association of Letting Agents)

Focuses on compliance and standards for smaller and independent agents.

RICS (Royal Institution of Chartered Surveyors)

Higher-level professional body, especially for surveyors, valuers, and high-end estate management.

Safeagent

Focuses on promoting accredited agents who follow strict client money protection and operational standards.

Additional Legal Requirements

Agents must comply with AML (Anti-Money Laundering) rules if they handle rental income over certain thresholds.

Agents must follow Consumer Protection from Unfair Trading Regulations.

Since October 1, 2014, they must display their fees, redress scheme membership, and CMP membership clearly (Consumer Rights Act 2015).... Read More

Hi Zoe,

Please try a reboot or a different browser as it seems to work fine for me at the moment :)... Read More

Although heavily pushed by Ed Miliband the press release is not correct and has been amended to say the 2030 date 'it is proposed, but not yet passed into law and under consultation.'

The consultation finishes in early May.... Read More

1. Challenge Legality of Charges and Conduct
Service Charge Increases

Request a breakdown: Under the Landlord and Tenant Act 1985 (s.19), service charges must be reasonable. Demand a full breakdown of costs, particularly the alleged water bill overcharge.
Challenge the reconciliation: They cannot demand retrospective payments unless properly accounted for and justifiable. If the Business Stream invoice was an error, the PMC should have fought it before passing costs to leaseholders.
Check lease terms: If the lease specifies monthly service charge payments, their demand for a lump sum is unenforceable.

Additional Fees & Admin Charges

Unfair tenant registration charge (£60 per year + £90 threat for non-compliance): The Building Safety Act 2022 does place obligations on leaseholders regarding fire safety information, but it does not mandate paying an arbitrary fee to a PMC. Request legal justification in writing.
Late payment penalties & admin fees: If these charges were never in the original lease agreement, they are likely unenforceable.

2. Engage Legal and Regulatory Avenues
First-Tier Tribunal (Property Chamber)

Challenge Unfair Charges: Leaseholders can take the PMC to a tribunal to determine whether charges are reasonable.
Request Inspection of Financial Records: Under the Landlord and Tenant Act 1985, you are entitled to see invoices and contracts related to the service charge.

Complaint to the Redress Scheme

Check if the PMC is registered with The Property Ombudsman (TPO) or The Property Redress Scheme (PRS). If they refuse to engage, you can escalate the case there.

Trading Standards & CMA Complaint

If the PMC is using unfair business practices, you can complain to Trading Standards or the Competition and Markets Authority (CMA).

3. Enforce Freeholder Accountability

The freeholder is ultimately responsible for the PMC’s actions. Given the rapid turnover of agents, they may be aware of mismanagement but unwilling to intervene.
Organize Leaseholders: With all 27 flats owned by investors, collective pressure could persuade the freeholder to replace the PMC.
Right to Manage (RTM) or Enfranchisement: If leaseholders own 50%+ of the flats, you could remove the PMC and take over management.

4. Financial Strategy

Negotiate Fees: If many leaseholders are refusing to pay disputed fees, you may have leverage for a reduction.
Insurance & Utility Audit: Get independent quotes to see if costs are inflated.... Read More

Key Considerations:

Allocation of the Freehold Purchase Cost
Since the vast majority of the £20k purchase price is attributable to your own flat’s lease extension (because the other two flats have long leases and nominal ground rent), you need to ensure that this cost can be added to your base cost for CGT when you sell.

Lease Extension Without Consideration
If you and your wife (as joint freeholders) simply extend the lease without charging yourself, HMRC might argue that no "market transaction" took place, which could make it difficult to claim the cost as part of your capital base.
A possible risk is that HMRC may view this as an enhancement to the property, but without a clear cost allocation, they could challenge its inclusion in the CGT base.

Valuation and ‘Paper Transaction’
One solution is to have a formal valuation of the lease extension and explicitly document a lease premium (i.e., a price for the lease extension). This could be set at a nominal value, but it must be commercially justifiable.
The lease extension should ideally be completed via a formal agreement where your freehold entity (you and your wife) grant the extension to your leasehold interest.

Tax Implications of Charging a Premium for the Lease Extension
If your freehold entity (you and your wife) charges you (your leasehold interest) for the lease extension, the premium you pay can be added to your flat’s capital cost for CGT purposes.
However, this would generate a taxable gain for you and your wife as freeholders. Since the freehold cost was low, there might be a profit element subject to CGT.

Possible Way to Structure It:

Step 1: Buy the Freehold in Joint Names
This is already your plan, which avoids issues of owning the lease and freehold in the same name.

Step 2: Obtain a Professional Valuation of the Lease Extension
This should reflect a fair market price for extending a 56-year lease to, say, 999 years.

Step 3: Formal Lease Extension with a Consideration
You could set a premium that reflects the proportion of the freehold cost that relates to your flat’s lease extension.
This premium should be formally documented and paid from your leasehold interest to your freehold ownership.
This allows the cost to be included in your flat’s base cost for future CGT.

Step 4: Minimize Tax Impact for the Freehold Sale
If the premium for the lease extension is roughly equal to the cost of the freehold purchase attributable to your flat, the gain on the freehold side should be minimal.
Since you and your wife each have a £6,000 CGT allowance (2024/25 rates), any small gain might be covered by allowances.

Alternative Approach – No Charge for Lease Extension

If you decide to grant yourself the lease extension without any consideration:

You may still be able to argue that the cost of acquiring the freehold should be allocated to the leasehold interest in future CGT calculations.
However, the risk is that HMRC might challenge this, as there is no actual transaction showing a capital cost increase.
This approach is simpler but comes with some uncertainty regarding CGT treatment.

To ensure the freehold purchase cost is properly reflected in your CGT calculation:

A formal lease extension with a market-based premium is the safest approach.
If you and your wife set the premium close to the relevant proportion of the freehold purchase price, the tax liability should be minimal.
A professional valuation would strengthen your position with HMRC.... Read More

Principal Private Residence Relief (PPR) – Since your son will be living in the property, part of the gain may be exempt from CGT. However, because it’s an HMO and he is renting out multiple rooms, only the portion of the property used as his main residence will qualify for relief.
Letting Relief – This was significantly reduced in 2020, but if he meets the conditions, he might get some relief for the part of the property he rents out.
Apportionment on Sale – When selling, the gain will be split between the proportion of the property used as his main residence (exempt) and the rented-out portion (liable for CGT).... Read More

Mick Roberts for PM... Read More

Please see the contact form at the bottom of the article.... Read More

CIOT is seeking clarification from HMRC, which is not forthcoming, concerning all forms of incorporation.

CIOT is also asking for an amnesty for all its members dependent on this clarification. It is not clear-cut for any incorporation at the moment.... Read More

The discrepancies in the stated property values on the deeds could arise from several factors, and understanding how these figures are determined is key to clarifying the situation. Here’s a breakdown of how property values on deeds might be assigned and the potential implications:
1. Who Determines the Values?

Land Registry: The Land Registry typically records information provided during the transaction. If no money changes hands (as in transfers for nil consideration), the "value" might not directly relate to a sale price.
Stamp Duty Land Tax (SDLT): In England and Northern Ireland, SDLT is payable on property transfers, except in cases of nil consideration. Even so, the property’s market value might still be assessed for record-keeping.
Solicitor's Estimate: Solicitors might include a market value estimate on the transfer documentation, either based on local comparables or professional valuation, especially if there is no clear sale price.

2. Why Do the Values Differ?

Market Fluctuations: The values may have been based on differing points in time or methodologies. For example:
£185k might have been based on the solicitor's initial assessment or a previous valuation.
£248k might reflect a valuation closer to the average market value of similar properties on the street.
Land Registry Discretion: The Land Registry may update or revise values during record processing if it has access to more recent market data.
Clerical Errors: Sometimes, discrepancies can result from human error during documentation or registration.

3. Does It Matter?

For Tax Purposes:
If there’s no money changing hands and it’s a family transfer (e.g., to your kids), the stated value generally has no immediate tax implications unless other liabilities (e.g., inheritance tax, SDLT thresholds, or capital gains tax) arise later.
Future capital gains tax (CGT) liability for your children could use the market value at the time of the transfer (£185k or £248k, depending on how HMRC interprets the deed).
For Mortgage or Financial Records: If anyone takes a loan or mortgage against the property later, the discrepancy in recorded value might raise questions.
Legal or Administrative Accuracy: Having consistent and accurate records is ideal for avoiding confusion in future legal or financial dealings.

4. Steps You Can Take

Ask for Clarification from the Land Registry: Request an explanation of how the values were derived for each transfer.
Seek a Formal Valuation: If the value is critical, consider getting an independent valuation to establish a consistent benchmark.
Document Everything: Keep records of all correspondence with your solicitor and the Land Registry to address discrepancies if they cause issues in the future.

5. Implications for the Kids

When transferring to your children, the value of the property at the time of transfer will set the baseline for any future tax assessments, such as:

Capital Gains Tax (CGT): If they sell the property in the future, CGT liability will be based on the difference between the sale price and the value at the time of transfer.
Inheritance Tax (IHT): If the transfer forms part of your estate planning, ensure that the valuation aligns with your broader strategy.

It’s good practice to resolve these discrepancies now to avoid potential issues later.... Read More

Hi Bob, I have added a link to the full data tables used.

Their Yield calculation is based on annual rental income as a percentage of Value.... Read More

Daily Mail have a lot of angry Landlords!
>> https://www.dailymail.co.uk/news/article-14001855/Keir-Starmers-wrong-working-people-Furious-landlords-savers-self-employed-slam-PMs-claptrap-prejudice-hinted-tax-hikes.html... Read More

Dear Mike,
The maximum fine for a breach of Licence is £30,000!

I would recommend you contact our friends at Landlord Licensing and Defence >> https://landlordsdefence.co.uk/... Read More

Hi Jess, Do you have a Partnership agreement and what does it say?... Read More

Correct that should be £315,000 per individual Landlord not per property and now corrected thank you :)... Read More

Hi Jane,
I would recommend a tax advisory service with a very wide set of skills and experience. Someone like Forbes Dawson >> https://forbesdawson.co.uk/... Read More

I don't think you quite get we report the news sometimes of what others are saying without always giving an opinion, but we are always championing on behalf of good landlords.... Read More

Me thinks you may not read all the articles :)... Read More