Mark Alexander - Founder of Property118

Hi Chris

The answer is Yes but the tax consequences need to be thought through properly. This isn’t the place to do that. Please contact your Property118 consultant.... Read More

Not really. If your business is an established Partnership there may be no SDLT due but forming a Partnership with the intention of mitigating SDLT falls foul of anti-avoidance profer.

If there are genuine commercial reasons for the existence of a Partnership that’s fine, but be prepared to be challenged by HMRC over it and be prepared to run the Partnership for a considerable amount of time to demonstrate substance over form. A minimum of years three years is the guidance most professional advisers recommend.... Read More

For the reasons already given, property investment businesses are NOT eligible for , “Retirement Relief” (AKA Business Asset Disposal Relief or BADR).... Read More

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Hi H

This wouldn't really be an incorporation as such. You would just be selling the house to your company.

In terms of proving the current value, if the property has no mortgage then I would recommend Hometrack. It will cost you £20. If it does need to be refinanced you can obviously use the mortgage valuation.

The value of the property at the date of purchase should be shown at HM Land Registry, so no problem there. Also, as you say, there will be no CGT to pay if the property hasn't increased in value. However, you will need to pay the 5% SDLT surcharge.

If you have any further questions please ask me here.... Read More

The article was drafted and scheduled for later publication as part of a series of articles prior to the increase to 5% Now corrected, thank you.... Read More

New electric cars are not a fair comparison though Mick.

A better one might be a rule to say that all ICE car manufacturers must modify all cars they previously sold to be electric.... Read More

I think the next General Election will be a snap election within three years and the outcome of it will be a Conservative/Reform alliance. Only time will tell whether I am right and whether there is still a PRS to save at that point.... Read More

Also, New Zealand’s equivalent to the UK’s Section 24, which restricted the deductibility of interest expenses on residential rental properties, was introduced in March 2021. This policy was in effect for approximately three years. In late March 2024, the New Zealand Parliament passed legislation restoring full interest deductibility for residential investment properties, effective from April 2024. 

Link https://lwb.co.nz/content/yes-landlords-gain-from-the-repeal-of-interest-deductibility-rules-but-it-was-a-flawed-law-from-the-outset/... Read More

Somebody told me recently that the average NRLA member only owns 4 properties. If that is true, it's a sign that most of the serious players in the market do not see the NRLA as being a representative voice for them, and/or that they are just not listening to the people they should be targeting as members.... Read More

Shares can indeed be gifted, just as properties can, but not without crystallising any CGT they might be pregnant with.... Read More

Incorpration doesn't "avoid" CGT. Instead it rolls capital gains up to the point of incorporation into the company shares. This can be particularly helpful if the company plans to sell some properties to reinvest elsewhere or to de-leverage. The CGT only falls due if the shares in the company are disposed of or if the company is liquidated prior to death.

Incorporation does not avoid IHT either, but it can make IHT planning far more manageable. For example, the value of the founders shares can be frozen at incorporation and the future growth can accrue to a separate class of shares owned by a Discretionary Trust for the bloodline of the founders, or indeed by the founders next generation.

The above is not to be regarded as comprehensive advice, but instead is intended to provides some further insight into what is achievable.... Read More

The X Tweet that the Crusader is referring to has blown up on Social Media. I first saw it posted on a landlord Facebook Group and it got 86 comments in a matter of minutes.

As soon as I saw it I reported it to Facebook as Hate Speech and also for inciting criminal activity including theft.

I would urge all landlords in Scotland to familiarise themselves with the name and face of this individual and his friends to avoid the carnage that would undoubtedly follow from a bad decision to give him the keys to their property.

In fact, I was so incensed that I did a bit more digging, found the details of his full name, employer and other affiliations and came up with a few extra ways (all perfectly legal and above board) to serve some well deserved karma back to him.... Read More

Apparently, he's a practicing barrister at https://gardencourtchambers.co.uk/barrister/nick-bano/ and works with the homeless.

It looks to me like he lives with his clients too!... Read More

On the day of purchase then yes. However, in future the property value and the mortgage may have increased. In that scenario, the calculation is more complex. A persons positive capital account balance is the amount of money they invested into the business AND retained from profits/losses over the life of the business MINUS the amount of money they withdraw from the business including payments of tax.... Read More

They need to bring back CGT indexation allowances and taper relief.

Indexation Allowance and Taper Relief were regarded as fair because they aligned the taxation of capital gains with principles of equity, particularly by ensuring that only real economic gains were taxed and by encouraging long-term investment. Here’s why they were seen as fair:

Indexation Allowance:

Protection from inflation: Indexation adjusted the base cost of an asset in line with inflation, meaning that taxpayers would not be taxed on “paper gains” that arose purely from inflation. This was seen as equitable because it ensured that CGT applied only to actual increases in the asset’s real value, not the inflationary increase.

Neutrality: By factoring in inflation, the allowance helped maintain fairness across different economic periods, ensuring that individuals and businesses did not suffer from high taxes in periods of rising inflation, where asset values increased only in nominal terms.

Taper Relief

Encouragement of long-term investment: Taper Relief incentivised holding assets for longer periods by reducing the taxable gain based on how long the asset had been held. This was seen as fair because it rewarded patient, long-term investors who contributed to economic stability, as opposed to those making short-term speculative gains.

Progressive reduction in tax burden: The tapering effect meant that, over time, individuals could expect a lower CGT rate on their gains, which was particularly appealing for entrepreneurs and business owners looking to grow assets over the long term. The longer the asset was held, the more tax-efficient it became, which was viewed as fair to those who made lasting investments.

Overall, these reliefs were seen as reflecting economic reality and promoting investment behaviour that was considered beneficial for the wider economy, while avoiding taxing gains that were merely nominal due to inflation or short-term price movements.... Read More

There are always pre budget rumours. Only time will tell which ones are true... Read More

It sounds like you used a process called novation as opposed to SIS.

Without significantly more information it is not possible to comment on your directors loan. Did you actually inject cash into the company? If if was just a balance sheet transaction with no cash actually changing hands at the point of incorporating the CGT should have been paid then.

If you rolled capital gains into shares using s162 relief the CGT you deferred will not fall due until you dispose of the shares or wind up the company.... Read More

This was not written to attract new clients.

Good luck with your planning.... Read More

Unfortunately, I very much doubt we will be vindicated in time.... Read More