On 18 February RRL hosted a property tax seminar at Scorrier House which was incredibly well attended by clients and representatives from professional services. A whole host of aspects were covered in the short, but detailed morning event and a few key points are highlighted below:-
- Watch out for property dealing and property development if not carried out in a limited company;
- For property investment, consider incorporation if owners are higher-rate tax payers;
- Give careful thought to cash extraction methods for limited companies – especially corporate pension contributions;
- Always consider structuring where carrying out a number of projects, and where profits from one project will be invested in another;
- Watch out for residential property ownership in a limited company if not being used for a business – always consider ATED;
- Always consider capital allowances on transactions involving non-residential property, or residential property that has been, or will be, holiday let;
- Always check the availability of capital gains entrepreneurs’ relief on relevant sales of assets;
- Keep up to date and watch out for changes announced in the Budget (looks like it will now go ahead on 11 March 2020 per a tweet from Rishi Sunak following the seminar);
- Always consider principal private residence relief where the main home is being sold, especially if a sizeable plot;
- Be aware of the capital gains tax changes to principal private residence relief and letting relief being introduced on 6 April 2020 – seek advice as to whether planning can be carried out to mitigate the impact;
- Watch the new 30 day capital gains tax rules for returns and payments coming in from 6 April 2020;
- Consider VAT on every property transaction or build/development;
- Consider SDLT on every property transaction – have all reliefs been claimed? Is the property definitely all residential property?
- Property owners should always consider inheritance tax – what is their exposure? Can this be mitigated through planning?
- Watch out for: investments being held within trading companies; investments being held in holding/parent companies; minority share holdings being owned by trading companies or trading groups;
- Watch out for inheritance tax changes in the Budget;
- Make sure property owners have up-to-date wills and powers of attorney in place.
If you would like to discuss any aspects of property tax, please contact the tax team on 01872 276116 or email firstname.lastname@example.org