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Property Articles

New ‘payment on account’ tax regime for capital gains tax – April 2020

First Published: September 2019 | Available in: Property Articles Your Property Network

By specialist property accountant Stephen Fay ACA

From 6 April 2020, a CGT Tax Return will need to be filed, and a payment on account will need to be made, within 30 days of the disposal of a residential property, in most cases. This article looks at how this new CGT regime affecting almost all landlords will work in practice.
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Raising rents to mitigate the impact of section 24 mortgage interest relief restrictions

First Published: July 2019 | Available in: Property Articles Your Property Network

By specialist property accountant Stephen Fay ACA

The tax impact of the ‘Section 24’ mortgage interest relief restrictions – announced in July 2015 and rolling out over tax years 2018, 2019, 2020, 2021 – has by now been largely understood by the residential landlords community. However, in our experience, most landlords have focussed on how they can reduce costs and manage their mortgage expenses, but haven’t really focussed on the other aspect to their finances – raising rents to increase income. This article will focus on the financial benefit of raising rents, and how to do this in practice.
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How the Taxman can contribute to your health

First Published: May 2019 | Available in: Property Articles Your Property Network

By specialist property accountant Stephen Fay ACA

Many landlords now operate a company, either as a property management agent, to directly own rental property, or possibly a consulting company. And, many such company owners and directors are of an age where current and future health concerns are as important as financial concerns.

This article sets out some of the ways in which a tax deduction may be gained for health-related expenditure for company owners.
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Landlords – don’t obsess about paying off ALL your mortgage borrowings!

First Published: March 2019 | Available in: Property Articles Your Property Network

By specialist property accountant Stephen Fay ACA

The traditional residential landlords investment model has been to use mortgages (leverage) to buy properties, and so benefit from the ability to buy more property, and make more rental profit and capital gains, as a result. Mortgage interest tax relief restriction (known as ‘Section 24’), means that tax now plays a major role in the overall picture for landlords – but the fundamentals of using mortgages to magnify returns hasn’t changed.

This article looks at where the ‘sweet spot’ is for many landlords, in terms of balancing leverage and financial return, and what the benefit & limitations are in moving to a fully-unencumbered position.

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Restriction of CGT Private Residence Relief & Private Lettings Relief – impact and planning

First Published: January 2019 | Available in: Property Articles Your Property Network

By specialist property accountant Stephen Fay ACA

The Autumn 2018 Budget announced the restriction of Private Residence Relief (PRR) and Private Lettings Relief (PLR), from April 2020. The tax reliefs act to reduce the CGT due on the sale of a property that a landlord has lived in – however, Government now thinks these tax reliefs are too generous, and will impose restrictions which could mean thousands of pounds of extra tax payable.
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Spending Money on Property repairs to offset the impact of ‘section 24’ mortgage interest relief restrictions

First Published: November 2018 | Available in: Property Articles Your Property Network

By specialist property accountant Stephen Fay ACA

The single biggest tax issue facing many landlords who own mortgaged residential rental property is the introduction of the new (as of tax year 2018) mortgage interest relief restrictions known as ‘Section 24’. This article looks how landlords can spend money on property repairs to help to mitigate the impact of this significant worsening of the tax regime for ‘private landlords’ (meaning, landlords who own their property in their own personal name, or in a partnership).
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Company owners – MASSIVE tax benefit in having an electric company car from April 2020

First Published: September 2018 | Available in: Property Articles Your Property Network

By specialist property accountant Stephen Fay ACA

Many property investors now operate a limited company, and many have spare funds in the company that could be used to fund a company car – or, who would naturally prefer to run their car via the company if tax-efficient to do so – which, at present it almost always isn’t. From April 2020, there will be a radical change to the electric company car regime that will mean electric company cars will become very tax-efficient – this article looks at why …

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What to do with spare funds held in your property company

First Published: July 2018 | Available in: Property Articles Your Property Network

By specialist property accountant Stephen Fay ACA

Many property investors now operate a limited company, and may not be able to tax-efficiently take all of the company’s profits out, due to their personal income. This article looks at what options are available to company property investors who want to be tax –efficient by retaining spare funds within their company.

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Using a simple partnership combat the effect of Section 24 mortgage interest restrictions

First Published: May 2018 | Available in: Property Articles Your Property Network

By specialist property accountant Stephen Fay ACA

Tax year 2018 sees the start of the new ‘Section 24’ residential mortgage interest relief restrictions, which phase in over tax years 2018 (25%), 2019 (50%), 2020 (75%), 2021 (100%), with only a flat-rate 20% tax credit allowed for mortgage interest / fees paid, regardless of the tax rate of the investor. However, using a ‘simple’ partnership can be useful in allocating property profits in the most beneficial way to ensure that each individual’s tax status is fully-utilised.
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How to avoid a HMRC Tax Enquiry

First Published: March 2018 | Available in: Property Articles Your Property Network

By specialist property accountant Stephen Fay ACA

Most property investors are required to file an annual tax return with HMRC, to account for their personal income and pay tax on that income. As this system is on a ‘self-assessment’ basis, and there are over 8 million personal tax returns filed each year, HMRC simply don’t have the resources to check every tax return that is filed – instead, HMRC look at a sample of tax returns each year – this used to be called an ‘investigation’, whereas more recently HMRC call this an ‘Enquiry’ (intended to sound less confrontational!).

This article looks at what a HMRC Enquiry is exactly, and how the risk of an Enquiry can be legitimately minimised.

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