Ian Haynes

Registered with Property118.com
Monday 26th August 2019


Latest Comments

Total Number of Property118 Comments: 3

Ian Haynes

9:52 AM, 5th July 2021, About 5 months ago

A Quiz For Property Traders

You would need to look at treating this as a sole trader activity (the question states there is no other family and the transactions are done in his personal capacity, so I think this rules out the use of a partnership and/or a company) compared to CGT transactions.
HMRC would prefer the trading route as it would likely generate more income tax and NICs, compared to the CGT method.
As the individual, you would need to factor in the rates of tax (doesn't say if they are a UK taxpayer or Scottish) applicable, whether personal allowances are available in full or restricted, and whether the CGT annual exemptions are used elsewhere.
As far as costs are concerned, the trading route allows for general costs of operating the activity to be allowed including the cost of the legal fees, searches etc. whereas via the CGT route on the capital costs (legal fees etc.) are allowable; doubt there would have been any improvements made that would qualify.
In order to ensure the buyer could get a mortgage, they would be better retaining the property for six months rather than flipping straight away, and this is probably more likely if the increase in resale prices are to be believed. This could allow them sufficient time to secure PPR on the property prior to sale, so if going for the CGT route, this could result in the 'profit' (gain) being tax free. Not easy for most to uproot their lives sufficiently to do this but it's based on quality not quantity, so for a singleton, it could be possible.
As it is two transactions I suspect HMRC might have a hard time insisting this was a trade, but this would of course depend on what is actually done to the property prior to each sale - the 'badges of trade' would come into play here. You have to consider intention.
My guess - no, I've not done the workings either - would be that if all of the reliefs were available, the CGT route would result in a lower tax cost.... Read More

Ian Haynes

14:39 PM, 25th January 2021, About 10 months ago

Death of a separated joint tenant during pandemic?

Dear All,

By way of an update, I have heard back from the letting agent. The mother as executor will be continuing to pay the rent for the foreseeable future (at least the next two months), and in the meantime they are decorating through-out to put the house back to the state it was when the tenant first moved in. It looks like the paperwork wasn't updated, but the separated husband will not be returning. This does however mean that the property is being internally fixed up and gives some scope to find new tenants in the interim.

Thanks to all who have contributed.

Ian... Read More

Ian Haynes

14:06 PM, 20th January 2021, About 11 months ago

Death of a separated joint tenant during pandemic?

Thanks to those who have responded thus far. The comments reflect what I had thought but wanted to know that this was the right direction.

I am waiting to hear from the letting agent on the current situation, but assume that he is trying to establish whether the father will take up residence again with the children or not. If so then this does resolve the issue to a degree and if not, I need to establish how to get the property emptied, get it reviewed for damages etc. and the keys back.

I don't know the exact circumstances of her passing, but for info, my landlord insurance advised that while they don't provide for lost rent due to the death of a tenant, they would cover the cost of any remedial costs - while not pleasant to think about it, the example they gave was the cost of replacing, repairing or cleaning items where loss or expense is due to their death.

Will try to update this feed as I learn more.

Thanks

Ian... Read More