Simon Lever

Registered with
Monday 15th June 2015

Latest Comments

Total Number of Property118 Comments: 124

Simon Lever

19:09 PM, 9th April 2021
About a month ago

Councils using 'Intelligence' to track down low EPC properties and fine £5,000

I have a property that was my mother's before she passed away and is currently let out.
EPC in 2008 was a C (80) with a potential to rise to a B(82) on the certificate.
Reassessed in 2018 with a rating of D(65) and a potential of D(65).
This is in a block of flats built about 20 years ago.
The only change, made by my mother, was to change the inefficient gas boiler to an efficient electric boiler.
Guess I may have to change it back to a gas boiler before 2025.... Read More

Simon Lever

18:37 PM, 21st March 2021
About 2 months ago

Selling a company with real estate portfolio?

There are some planning opportunities apart from just selling the whole company.
It depends on the timescale you are willing to look at and your personal circumstances.
• Selling one or more garages still in the company and making pension contributions in your name and if appropriate family names to reduce corporation tax to nil.
• Take the money you have input out with no consequences.
• Give shares to family and use the £2,000 nil rate dividend band to not pay tax on this income.
• Use the proceeds to buy back some of the shares making the extraction a capital gain. If necessary, issue more shares as a bonus issue if the reserves are available.
• Use a combination of the above.
There are other ways but these are the simplest.
This is not advice but just some thoughts.... Read More

Simon Lever

18:21 PM, 21st March 2021
About 2 months ago

Stamp Duty on Form 17 split?

Just to go back to the original post:
The OP says that the income tax returns show income from a partnership inferring that a separate partnership tax return is prepared and submitted. If this is the case then HMRC have accepted there is a separate business and the profits can be spilt as the partners wish without the need for any Form 17 or trust deed.
If there is no partnership return then the profits are automatically split 50:50 and Form 17 can only be used to change the split of income to the underlying ownership between husband and wife (or civil partners). Hence the need for a trust deed to change the underlying ownership.
For a belt and braces approach if there is a partnership the OP should make sure there is a written partnership agreement. It Is quite common for H & W to have a business partnership, not so common for there to be a written partnership agreement!... Read More

Simon Lever

2:57 AM, 3rd January 2021
About 4 months ago

Investor or Developer - How would HMRC treat me?

You have said that there will be a company set up.
Personally you would be taxed on any salary as a director/employee under PAYE. If you took shares then any dividends would be taxed at 7.5% if you are a basic rate taxpayer and 32.5% if you become a higher rate taxpayer. The first £2,000 of any dividends are taxed at 0% but still use up your basic rate tax band.
The company would be taxed depending on how the intention to use the properties was originally set out. There should be board minutes saying that either “we are buying these properties to develop them and sell them” or “we are buying these properties as an investment and will rent them out once developed”. This sets out the initial intention and can be used as evidence if queried by HMRC.
Things change and if there is no market to sell them they could be rented for a while to gain some income prior to selling them. Conversely they could be sold even if the intention was to rent them as there is too good a price offered.
The corporation tax computation would be calculated on the sales of properties as a gain if the intention was to invest and as trading income if the intention was to trade. All corporation tax is currently charged at 19%
Your personal CGT and IHT position would be different if the company was trading or investing. If trading then holdover relief and entrepreneurs’ relief may be available for CGT and possibly business property relief for IHT. Depends on how the company is perceived by HMRC.
Never have investment properties and properties for trading in the same company.
Take professional advice before doing anything and be prepared to pay for it, it will be cheaper in the long run.... Read More

Simon Lever

13:39 PM, 22nd November 2020
About 6 months ago

Transferred residential to our sons?

The reason why a rental needs to be paid is for inheritance tax (IHT) purposes.
If you give away an asset but continue to enjoy use of the asset, then there is a reservation of benefit and for IHT purposes the asset still forms part of your estate.
For IHT if you gift an asset then it becomes a Potentially Exempt Transfer (PET) which falls outside of your estate for IHT after 7 years from the date of the gift. If a reservation of benefit exists then the 7 year period does not start and even if you died, say, 25 years after the gift if you had not done anything to remove the reservation of benefit then the asset would still form part of your estate.
One way to remove the benefit is to pay market rent for the use of the asset. If you only occupy one room then you need to determine what the market rent for the room is. However, I presume, you will also still have use of the other facilities such as kitchen, bathroom, garden, living space and the use of these will also need to be factored into the rent figure.
The rent has to be full market rent – any under charge still leave a benefit and therefore does not work. You may need to check if 2 such rooms are rented if the property then becomes an HMO!
Also consider that eh recipient of the rent will have to pay tax on it.
This article sums up the situation nicely: Read More