Many landlords run a property business from a home office but are scared to claim business expenses because they are worried about triggering a capital gains tax bill when they move house.
The myth is claiming tax relief for working from home makes part of the property business premises which is liable to capital gains tax when sold. Continue reading Claiming home as office expenses for landlords
Falling house prices has meant up to £90 million has been overpaid in inheritance tax by families and friends who have been left a home in a will.
Insurance firm NFU Mutual reckons the tax is reclaimable under a special rule called sale of land relief. Continue reading House price crash triggers tax windfall on inherited homes
Landlords who have switched personal property investments into a company cannot claim capital gains tax reliefs on the transfers, according to a landmark tax tribunal case.
Traders have claimed incorporation relief on their business properties and assets for many years when changing their status from a partnership or sole trader to a limited company. Continue reading Landlord claim for CGT relief kicked out by tax tribunal
The tax man is urging landlords to keep better financial records with the help of apps on their mobile phones.
A list of several providers offering mostly free apps for a range of mobile operating systems, like Android, Windows and Apple is on the HM revenue and Customs website. Continue reading Tax man urges landlords to keep accounts on their phones
Accounting for spending on letting property before the first tenant moves in often confuses landlords – and their accountants.
Countless landlords miss out on potential tax savings because their financial advisers wrongly claim pre-letting expenses are not allowed by HM Revenue & Customs. Continue reading Pay less tax by claiming pre-letting costs
Shocked Chancellor George Osborne has ordered a closer scrutiny of buy to let tax reliefs after finding out that some of Britain’s richest landlords pay little or no income tax.
The Chancellor was shown redacted copies of tax returns with all personal data removed, and naively realised that instead of paying around a third of their income in tax, many were handing the tax man just 10% or less. Continue reading Shocked Chancellor orders landlord tax scrutiny
Property investors will pay more inheritance tax and capital gains tax after the government changed the basis for calculating index-linked increases in reliefs.
The back-door move will increase the amount of tax collected on all transactions from April 2012 despite Chancellor George Osborne promising CGT rules would remain the same during the life of this Parliament. Continue reading Hush-hush Chancellor Quietly Puts up CGT and IHT
Ringing HM Revenue and Customs to try to find a sensible answer to a pressing tax problem is never easy.
Promising to answer calls when they ring is not the same as giving a reasonable answer to a taxpayer’s questions.
Landlords suffer as much as anyone else from the frustration of dealing with HMRC.
Many tax advisers have a checklist for speaking to HMRC:
- Note the date and time of the call and number dialled
- Take the name of the person dealing with the call
- Note the conversation and clarify any points
- Write to the tax office referring to the call and detailing the conversation. Ask them to contact you in writing if they do not agree with your notes of the call
- File a copy of the letter
Taxpayers who are unsure of the status of inquires with HMRC can take a backdoor approach that will deliver results called a subject access request (SAR) under the Data Protection Act.
HMRC must disclose any relevant information held about a taxpayer if an SAR is received.
A tax inspector does not have to reveal information about an ongoing investigation, but the file will include details of correspondence, transcripts of telephone conversations and other personal details.
To find out what the taxman has on file, a taxpayer must write to the data protection officer at the relevant office where the files are held.
Specify the precise information required, like copies of correspondence and telephone calls.
HMRC can charge a £10 fee for each SAR made.
Landlords can make an SAR request to any organisation registered under the Data Protection Act, including banks, mortgage lenders, councils and credit card issuers.
SARS are particularly useful for taxpayers who have received specific advice not to file a form or tax return from a call centre but then pick up a fine or penalty – spending £10 to go through the file could save £100 or more.
How to handle VAT on labour and materials for property conversions is a recurring problem for landlords and property developers.
The question pops up regularly from property investors who have ventured in to shared house conversions.
Shared houses, or houses in multiple occupation (HMO) present special planning, VAT and tax problems as they are wrapped up in extra legislation controlling health and safety.
Continue reading VAT’s the problem for property developers
Claiming interest on loans and finance as a business expense is one of the regular top questions from property investors.
This Guest Article has kindly been written for us by Steve Sims, author of ‘Understanding And Paying Less Property Tax For Dummies’. Steve and his wife Amanda also have a boutique accountancy business which specialises in providing property tax advice and accountancy services for buy to let property investors. Continue reading Tax relief on mortgage interest for buy to let property investments