Alex Norian

Registered with Property118.com
Thursday 29th July 2021

Bio
Tax Consultant @ Property118


Latest Comments

Total Number of Property118 Comments: 5

Alex Norian

10:53 AM, 23rd September 2021, About a month ago

Holiday Let Purchase - Best Through A Company Or Not?

Hi Martin,

The answer to your first question is that the interest is allowable provided the purpose of the finance is "wholly and exclusively" for the purpose of buying the FHL (s34 ITTOIA 2005). I would recommend you seek further advice if this process would result in the total finance on the 2 BTL cottages being in excess of the original purchase prices.

Yes, the holiday let could be purchased in your own name using your personal finances. Not using the company would likely be a missed opportunity, although there is no substitute for a bespoke consultation to understand all of the facts. If you have other income and don't need the FHL income to maintain your lifestyle, then perhaps the intention is to ringfence profits in a tax-efficient manner to continue to grow the portfolio? In this case, a company would be a tax-efficient vehicle to achieve this.

Who do you intend to inherit your portfolio when you pass? Do you have siblings / nephews / nieces etc?

Taking it a step further with a Smart Company structure would offer greater benefits still. See > https://www.property118.com/the-ultimate-guide-to-landlord-tax-planning/ and download the eBook if you've not yet.

Once you've digested the eBook, I would recommend booking onto a consultation so a tax expert can understand the full context before advising accordingly.

Alex N... Read More

Alex Norian

10:47 AM, 7th September 2021, About 2 months ago

Buying younger children an investment?

Hi Peter,

I would recommend formation of a SmartCo structure. Then loan the money to the company to purchase the property. This would mean your estate 'value' in the company would not be locked in the shares and could be repaid to you over time by virtue of your director's loan account or gifted to the kids.

It sounds as if you do not want / need the income and this would enable the ring-fencing of the profits within the structure to reinvest into growing the portfolio, to maximise the legacy for your boys.

It would also ensure that the capital appreciation not only occurs outside of your estate, but also outside of your children's estate.

You would then gift them freezer shares, which would not have increased in value, when they turned 18.

If you've not yet read The Ultimate Guide to Landlord Tax Planning, I would advise you take a look.

https://www.property118.com/the-ultimate-guide-to-landlord-tax-planning/... Read More

Alex Norian

13:01 PM, 19th August 2021, About 2 months ago

Capital gains tax on gifted equity?

Reply to the comment left by David Mensah at 16/08/2021 - 10:47
Consider Hometrack as a valuation method too - it's used by 13 of the top 15 UK mortgage lenders and costs about £20.

https://www.hometrack.com/uk/... Read More

Alex Norian

10:24 AM, 16th August 2021, About 2 months ago

Capital gains tax on gifted equity?

Reply to the comment left by David Mensah at 16/08/2021 - 09:27
As if often the case, there is a sliding scale here and a pragmatic approach means "not good enough" is not easily defined.

Ultimately, "will HMRC accept the valuation?" is a question that will depend on the figure as much as the source. You will need to denote on the return that the figure is an estimate and this is likely to prompt a sense-check on the valuation used.

See further reading - https://www.gov.uk/capital-gains-tax/records

I have known cases where HMRC have accepted estate agency valuations - but this does not mean that all estate agent valuations will be accepted.

It is about building a case as robust as you can, in the absence of having the records from the time of the transaction.

If this means obtaining multiple estate agency valuations and averaging, using a surveyor or HMRC's own professionals, these are the decisions that need to be made.

You might consider a call to the direct CGT helpline at HMRC, for extra peace of mind with your chosen route - 0300 200 3300.

My pleasure re: CG34.... Read More

Alex Norian

8:29 AM, 11th August 2021, About 3 months ago

Capital gains tax on gifted equity?

Agree with Mark above.

If unable to access the MV used by your uncle for whatever reason, an estate agency valuation would suffice or you can use HMRC's own valuation service - see below link (don't hold your breath! You will need to estimate for purposes of 30 day payment if this route used).

https://www.gov.uk/government/publications/sav-post-transaction-valuation-checks-for-capital-gains-cg34

Any evidence used to establish the MV at 2016 should be retained in the event of an inspection.... Read More