Tax on Property Investments

In the current financial climate, of spiralling house prices, a flat equities market and increasing disposable income, property is proving a popular choice for those making investments. With the prospects of an income return better than that offered on cash deposits, and the potential for large capital growth, many new entrants to this investment field are now familiarising themselves with the mechanics of taxation on these transactions and the commercial considerations of how to most efficiently structure their affairs.

The areas we most commonly advise on include:

• Whether to hold property personally or within a corporate structure. Companies have become more attractive for tax purposes recently, as if profits are less than £10,000, these are liable to 0% corporation tax.
• If held personally, whether to register one's spouse or other family members as legal owners. For husband and wife ownership, elections can be made to split the income for tax purposes on a basis different from the actual legal ownership.
• Where relevant, exempting all lettings income from tax under the generous rent a room rules.
• Minimising tax leakage upon exit.
• Considering whether it would be to your advantage to register for VAT and 'opt to tax' the property.
• Taking advantage of the generous new tax rules for flat conversions.
• For large holdings of property, considering whether it would be to your advantage to claim that the income is taxable as a Schedule D trade instead of Schedule A rent.
• Optimising use of Principal Private Residence relief.
• Structuring finance and repair costs so as to optimise the overall tax 'deduction'.

Whether you require pure tax compliance assistance, or a guiding hand in structuring your property holding, we have the specialist knowledge to be your trusted adviser.