Using a deed of trust to mitigate the impact of Section 24 and save tax

By specialist property accountant Stephen Fay ACA

The forthcoming mortgage interest relief restrictions – starting in tax year 2018 – mean that for many landlords there is a substantial benefit in re-structuring the beneficial ownership of their portfolio, through the judicious use of a ‘deed of trust’ (DOT), in order to make full use of spousal and family Basic Rate tax bands. But what is a deed of trust exactly, why are they beneficial, and how are they properly put into practice?
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Your home IS an asset – Kiyosaki was WRONG!

By specialist property accountant Stephen Fay ACA

In my experience, many property investors neglect their own home as a key part of their property asset base, which can be a serious wealth-building mistake. The ‘Rich Dad Poor Dad’ books – written by Robert Kiyosaki – make the case that your home is a liability rather than an asset – in this article, I make the case is made that the opposite is true (sorry Robert! – although I do still generally agree with your focus on income – or ‘putting cash in your pocket’ views).

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Should I incorporate my BTL portfolio?

By specialist property accountant Stephen Fay ACA

Many property investors are considering the option of incorporating their BTL portfolio to avoid the mortgage interest relief restrictions that are starting from tax year 2018 – as these new tax relief restrictions don’t apply to companies. However, there are a tax and finance challenges, which make the decision not as straightforward as many landlords believe.

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How to buy commercial property using a pension (SIPP) – a real example

By specialist property accountant Stephen Fay ACA

Many property investors are now looking at making pension contributions from their company, to their pension scheme. Pension schemes can’t own residential property, but the ‘next best’ alternative for many people is to own a commercial property.
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General Anti-Abuse Rule (GAAR) – what it is and why it’s important to property investors

By specialist property accountant Stephen Fay ACA

Many property investors are facing an increasingly challenging tax regime, following the Finance Act 2015 – restricting residential mortgage interest relief – which has received Royal Assent. There is now an added incentive for property investors to become more ‘creative’ with their financial affairs – however it is important to stay on the right side of the law. This article explains what the UK’s General Anti-Abuse Rule (GAAR) is, how it affects property investors, and how to ensure compliance with it.
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How to choose and work with a book-keeper

By specialist property accountant Stephen Fay ACA

Many property investors want to leverage not only their money, but also their time, and working with a book-keeper can mean that more precious time is spent on value-adding tasks rather than the more routine tasks. This article sets out how to choose a book-keeper, and how to work with them to get maximum value from their work.
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Clause 24: Why can’t I just transfer my personally-held properties (with personal mortgages) into a limited company?

By specialist property accountant Stephen Fay ACA

With the new Mortgage Interest Relief Restrictions (MIRR) starting from tax year 2018 (also known as ‘Clause 24’), many portfolio landlords will be seriously negatively affected, and the above question is the ‘elephant in the room’ – this article explains the risks involved in transferring properties into a company while maintaining underlying personal mortgages on the properties transferred.
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Operating a property management company effectively

By specialist property accountant Stephen Fay ACA

Many landlords own their property portfolio personally, and operate a property management company (PMC) alongside. There are a variety of reasons why a PMC may be useful, and there are often (not always) tax advantages to be gained. However, as always, care must be taken to ensure that a PMC is operated properly, so that in the event of a HMRC ‘Enquiry’, there are no issues that can be raised.
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Post-Clause 24 – what should I do with my properties?

By specialist property accountant Stephen Fay ACA

Clause 24 is the legislation that has now been given Royal Assent and so will mean restricted mortgage interest relief for landlords from April 2017 to the Basic Rate of income tax (20%), albeit on a sliding scale for 4 tax years to 2020-21. (See previous articles on this topic in YPN, and on our website).

As a result, for those landlords who don’t wish to (or are unable to) fully-incorporate their portfolio – see next month’s article – there is now the unenviable and unforeseen task of having to re-assess whether each rental property held makes sense to be retained personally with a mortgage, given the potentially punitive tax chargeable to do so.
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Using the Personal Savings Allowance from April 2016

By specialist property accountant Stephen Fay ACA

A new Personal Savings Allowance (PSA) is being introduced from April 2016, which could have some useful benefits to property investors who also lend money, and for those with a significant credit balance on any director’s loan account they may hold. This article explains how to make use of the PSA, and how to communicate the value to JV investors.
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