Dealing in property whether it be a simple buy to let or a major mixed-use development can have many tax and accounting implications and we can advise you on issues such as…
- Tax reduction strategies for rental income
- What is a repair and tax deductible and what is capital and not
- When to use a Limited Company to save tax
- Trading income versus Capital Gain considerations and advice
- Capital Gains rollover and holdover considerations
- Stamp duty planning
- VAT considerations of property deals
- Making the most of the Principal Private Residence election
- Tax issues on the sale of part of your residence
- Second homes
- Inheritance Tax angles
Planning the structure of a business from day one is key to minimising tax liabilities. Lanham and Company have experience dealing with many types of business structures from sole traders to limited companies and limited liability partnerships (LLPs). If you have multiple properties or developments then you will need to consider if a group structure is appropriate to ensure the best tax relief.
Capital Gains Tax
If you are investing in property then you will need to consider the capital gains position when you dispose of the property as well as how rental income is taxed. Private ownership has preferential exemptions and rates of tax but if you are a higher rate tax payer you may need to shelter the income in a company.
Maximising capital allowances is a simple way to reduce tax liabilities. A significant part of the cost of a building could qualify as plant on which capital allowances can be claimed. Items qualifying include suspended ceilings, wall panels, light fittings, water tanks, partitions, alarm systems and sound insulation to name just a few.
VAT is a complicated tax at the best of times but when applied to property it becomes even more complex. If you are a builder or developer then you will need to consider the type of development (listed conversion, new build, extension, etc.) as well as the intended use (commercial, residential, mixed-use) to determine the Vat rate (zero, standard or reduced). Proper planning is essential in this situation.
Stamp Duty Land Tax
Often overlooked in property planning. Don’t forget to plan for this tax.
Obtaining finance is often difficult and your accounts play a vital role in this. Proper consideration should be given to the value of property and the classification of liabilities as this could make all the difference when seeking finance.
- Get the structure right
- Utilise capital gains exemptions
- Maximise capital allowances
- Be very careful with VAT
- Reporting can make a difference