Category Archives: Tax Alert

Tax Alert 30th April 2019 – should you invest in Furnished Holiday Letting?


Tax Alert 30th April 2019 – should you invest in Furnished Holiday Letting?

TAX ALERT

FURNISHED HOLIDAY LETTING – WHAT’s IT ALL ABOUT?

Residential landlords have certainly been taking a tax bashing over recent years.  Many landlords may now need to assess whether they can continue with so many tax charges now levied upon them.  It comes as no surprise that attention is focusing on different ways in which to invest in property.  One area that has been grabbing attention is Furnished Holiday Letting (FHL).

IS FHL THE ANSWER?

There is no question that if you have a property that can be let under the conditions to qualify for FHL, there are some attractive tax benefits.

Unfortunately, for many existing landlords FHL will not be a quick fix, as there are strict rules for meeting the FHL qualifying conditions.

The main clue lies with the description holiday letting, rather than having a few long-term tenants, the property must have multiple short lets.

NEW DIRECTION

Your existing property may not be suitable to qualifying for FHL but if you are a prospective investor or an existing investor looking to invest in a new property, FHL may be worth considering.  Perhaps you already own or have inherited a holiday property that you are not making full use of, with a bit of planning you may be able to turn it into a profitable business.

FURTHER INFORMATION

If you are looking for further information about FHL, Paul Southward has produced two guides to provide you with more information about FHL, the rules and the tax advantages.

The topic of FHL has recently become hot gossip at the moment but as is often the case they may not always be painting the full picture.

For a summary of the qualifying conditions for FHL, download Paul’s guide here:-

FHL – Qualifying Conditions

And for a summary of the main tax advantages see Paul’s guide here: –

FHL – Tax Benefits

For more information contact Paul Southward.

Paul Southward


Tax Alert – 17th April 2019


Tax Alert – 17th April 2019

Corporation Tax – ATED and Corporation Tax Instalment Payments

TAX ALERT

Annual Tax on Enveloped Dwellings (ATED)

If your company owns a residential property that is valued at £500,000 or more, you may need to file an annual ATED return.

There are exceptions to the ATED charge; but it is still necessary to file ‘NIL’ ATED returns.

The latest return period covers the year from 1st April 2019.

The deadline for submitting the ATED return is 30th April 2019.

Contact us if you believe your company may need to make a return.

CORPORATION TAX INSTALMENT PAYMENTS

Changes for ‘very large’ companies

This is a reminder of changes to instalment payments for very large companies.

The changes to the corporation tax instalment payments were introduced in 2017.

They apply to very large companies for accounting periods beginning on or after 1 April 2019.

Companies with taxable profits exceeding £20 million will be required to make payments four months earlier.

For a 12-month accounting period, payments will be due in months 3, 6, 9 and 12 of the current accounting period.

The £20 million threshold is reduced where the company is a member of a group and is pro-rata’d for accounting periods shorter than 12 months.

Payments relating to bank levy and CT and supplementary charge on ring fence profits of oil and gas companies will not move to the new payment regime.

However, if a company is very large, all other liabilities including bank surcharge will move to the new regime.

Affected businesses should ensure that they are ready for the changes.

The first instalment payment under the new rules will be due before the final payment under the current regime and will impact on cash flow in the first year.

For further information on the above matters or any other tax query, contact Paul Southward.

Paul Southward


Tax Alert 16th April 2019 – Tax-Free Childcare + State Pension and Child Benefit


Tax Alert 16th April 2019 –

Tax-Free Childcare + State Pension and Child Benefit

TAX ALERT

A REMINDER TO RE-CONFIRM YOUR CLAIM TO TAX-FREE CHILDCARE

Tax-Free Childcare – quarterly reconfirmation process

Tax-Free Childcare is a government scheme that helps working parents, including the self-employed and company employees, with their childcare costs.

If eligible, claimants could get up to £2,000 per child, per year to spend on qualifying childcare.

RECONFIRM YOUR CLAIM

To continue to get Tax-Free Childcare, parents must check and reconfirm their details with HMRC every three months. Whilst HMRC say they will send a reminder when they need to do this; it is the parent’s responsibility to reconfirm on time.

Reconfirmation is simple and quick to do, but some parents are still failing to complete this process correctly or on time.

REMINDER

This is a reminder to parents to reconfirm their eligibility to ensure that they keep getting Tax-Free Childcare.

  • To reconfirm successfully, claimants need to:
  • click on ‘Reconfirmation’ in your childcare account(s)
  • click on the ‘continue’ button to see ‘Your reconfirmation summary’ (this shows the details you gave when you applied or last reconfirmed)
  • check their details are correct and are expected to remain the same for the next three months
  • read the ‘Declaration’ then click the ‘Accept and send’ button.

Your reconfirmation will be successfully filed when you see the ‘Thank you’ screen.

You will also receive a secure message in your childcare account about their eligibility.

CHECK

You can check your reconfirmation date at any time in your childcare account(s).

DON’T MISS OUT

Make sure that you are not missing out on Tax-Free Childcare.

CLAIM CHILD BENEFIT AND PROTECT YOUR STATE PENSION ENTITLEMENT

Making a claim to Child Benefit can help protect entitlement to the State Pension.

Child Benefit is a universal benefit payable to families as a contribution towards the cost of raising a child or children.

It is paid to a person who is responsible for a child under 16 (or under 20 and in approved education or training).

The weekly rate is £20.70 for the first child and £13.70 for each additional child. In addition to the payments, until the child is 12 years old a Child Benefit award also provides National Insurance Credits to the person who made the claim.

These National Insurance Credits can help protect entitlement to the State Pension.

Only one person can claim Child Benefit for a child.

For couples with one partner not working or paying National Insurance contributions, making the claim in their name will help protect their State Pension.

Even where the working partner claims Child Benefit, there is scope to transfer the National Insurance Credits and change who gets Child Benefit to protect the non-working parents State Pension.

If you receive Child Benefit payments, and you or your partner’s income is over £50,000, you may have to pay the High Income Child Benefit Charge.

The charge increases gradually by 1% for every £100 of income over £50,000.

At £60,000 the charge is equal to 100% of the Child Benefit entitlement.

However, you may claim Child Benefit and choose not to receive the payments, which means you will not have to pay the charge but still receive the associated National Insurance Credits and protect your State Pension.

If you have any queries regarding your tax affairs, contact Paul Southward.

Paul Southward


Tax Alert – proposed changes to Capital Gains Tax and Personal Residences


Tax Alert – proposed changes to Capital Gains Tax and Personal Residences

Capital Gains Tax

TAX ALERT

Proposed changes to Capital Gains Tax and Personal Residences

Private residence relief consultation

HMRC is consulting until 1 June 2019 on changes announced at Budget 2018 and due to take effect from April 2020, which reduce the final-period exemption from 18 months to 9 months and limit lettings relief to circumstances where owners are in shared occupancy with their tenants. The consultation also considers changes to other ‘ancillary’ aspects of the private residence relief rules.

The changes are to ensure the reliefs are properly targeted at owner-occupiers.

The final-period exemption currently means that where a property has been occupied as the owner’s only or main residence, the final 18 months of ownership always qualifies for relief regardless of the property’s use. The 36-month final exemption for disabled persons and those resident in a care home will not be affected by the changes.

Lettings relief, which applies where part or all of a main residence is let as residential accommodation, will not be available after April 2020 for periods where owners move out of the property and no longer share occupation with tenants, unless covered by one of the ancillary reliefs, such as job-related absences.

The other changes being considered include:

  • extending job-related accommodation relief to service personnel in accommodation not technically provided by the MOD, but rented in the private sector as part of the MOD’s future accommodation model pilot due to take place in 2019;
  • legislating for the concession, which allows an extension of the period for individuals to nominate one property as a main residence, where they have an interest in more than one property having only a negligible capital value, and they were unaware that such a nomination could be made;
  • legislating for concession, which allows for short delays in taking up residence, such as where an individual acquires land on which they have a house built, or have alterations or redecorations carried out before moving into a property purchased as an only or main residence; and
  • reforming the rules on spouse/civil partner transfers, which currently allow the receiving spouse to count any period where the residence was occupied as a main residence by their spouse as their own, and instead treat the receiving spouse as having inherited the ownership period and the use to which the property had been put in the past, regardless of whether it is a main residence at the time of transfer.

Following this consultation, the government expects to publish its response and draft legislation in the summer.

To keep up to date with all the latest tax issues, contact Paul Southward.

Paul Southward


Tax Alert Friday 5th April 2019


Tax Alert Friday 5th April 2019

TAX ALERT

CAPITAL GAINS TAX FOR NON-UK RESIDENTS

Non-UK Resident owners of UK property need to be aware of new changes

With effect from 6th April 2019 non-UK residents must pay tax on all UK land disposals – both residential and commercial.

They must file a non-resident capital gains tax return and pay any tax due within 30 days of sale.

NEED TO BE AWARE

All non-UK residents who own interests in UK land or property need to be aware of theses changes.  Professional advisers: Solicitors, Estate Agents and Land Agents need also need to be aware so that they can provide the necessary guidance.  KSK are able to assist with all UK tax matters relating to the disposals of property and should be your first point of call if queries arise.  Prospective sellers need to be aware that they will have to file a non-residential capital gains tax return with HM Revenue & Customs (HMRC) and pay any tax due within a very tight time frame.

PENALTY CHARGES

HMRC will seek to charge penalties for late returns and payments of tax.

COMMERCIAL PROPERTY

For disposals of commercial property, as the new rules only come into effect from 6th April 2019, it is only the growth in the property value from 6th April 2019 that will be taxable.  Non-UK resident owners of UK commercial property may wish to consider obtaining valuations at 6th April 2019 so as to accurately calculate any future capital gains tax and possibly avoid later disputes with HMRC.

NIL RETURNS ARE REQUIRED

The new legislation applies to all disposals of UK property owned by non-UK residents.  A non-resident capital gains tax return is required even where there is a capital gains tax due.  HMRC will impose penalties even for “NIL” returns.

WE ARE HERE TO HELP

Professional advisers and non-UK resident owners of UK properties who have any queries regarding the new rules can contact Paul Southward for further guidance.

Paul Southward

SUMMARIES OF ALL THE NEW TAX CHANGES

The new tax year starts on 6th April and we have reviewed the tax changes that come into effect this April and you can check these out in the downloads below..

Personal tax changes

2019-20 Personal Tax Changes

Business tax changes

2019-20 Business Tax Changes