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I’m a Property Company Director – What is a SIC Code and a Confirmation Statement?

First Published: November 2020 | Available in: Property Articles Your Property Network

By specialist property accountant Stephen Fay ACA

Many landlords now use a property company to either invest in property directly, or as a management company for their own personally-owned portfolio. Being a Company Director can mean a new world of strange acronyms and new things to learn about … this article looks at what a company ‘SIC’ code is, and also what a company ‘Confirmation Statement’ is – and why these are important aspects of companies that Directors need to have an understanding of.
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Should I Transfer Individual Properties into a Company?

First Published: September 2020 | Available in: Property Articles Your Property Network

By specialist property accountant Stephen Fay ACA

Many landlords own mortgaged residential property in their personal name, & are affected by ‘section 24’ mortgage interest relief restrictions, & so ideally would like to transfer individual properties into a property company, to avoid Section 24. However the CGT & SDLT cost of doing this is often prohibitive… but not always!
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How to fund your new property investment company tax-efficiently using borrowed funds

First Published: July 2020 | Available in: Property Articles Your Property Network

By specialist property accountant Stephen Fay ACA

Due to the ‘Section 24’ mortgage interest restriction for ‘private landlords’, investing in residential property via a property company is now a mainstream investment approach for the landlord community.

However, given that a new property company won’t already have it’s own funds to invest with, it is normally the company’s owner that provides funds – but how could this be done, using borrowed funds, and in a tax-efficient way?

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Finally, Vanguard SIPP pension arrives in the UK!

First Published: March 2020 | Available in: Property Articles Your Property Network

By specialist property accountant Stephen Fay ACA

Many landlords are of course keen to invest mostly in property, but many are also attracted to the tax relief that pensions offer, and to help with Section 24 tax mitigation, but may be worried about what the pension is actually invested in, and about high pension fund charges. A huge pension fund in the USA, Vanguard, has announced it will offer UK SIPP pensions from early 2020 – Vanguard is famous for its ultra-low charges and its simplified approach to pension investing – this is a big deal for UK pension investors as Vanguard has $5 TRILLION of assets under management – yet few UK investors have heard of them, until now …
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When can I stop delaying gratification?

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

By specialist property accountant Stephen Fay ACA

Many landlords and business owners are familiar with the concept of delaying gratification, to fund the start-up and growth of a property business that in later life can produce a meaningful income. However, it’s common for landlords and business owners to understandably focus solely on this without thinking too much about the final stage – when the business has been built, and the day arrives when gratification no longer needs to be delayed (yes, that day does arrive!)

This article looks at what delayed gratification means, why it’s usually an essential part of building any business, and also the longer term aspect.
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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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