Rupert Chapman

Thanks Mark
If you post the question on the group linked below, I can tag specialist brokers that can help.
It may be better to get a loan in Portugal, subject to qualifying UK income. Ex pat mortgages are more expensive.
Depending on use it could be more tax efficient to own it in a personal business capacity.
For example, if you use for holiday letting you will be vat registered with opportunity of input tax expense claims.
Also this will spread your risk against potential future uk tax rule changes.
I am aware that some folk own property in Portugal via Gibraltar based ltd companies.
I dont know whether the tax efficiencies of such are currently available.
If you find out please let me know?

https://www.facebook.com/share/AXmXtX1KBT86UhzE/?mibextid=K35XfP... Read More

Very important question for all that are seduced by guaranteed rent offers. There is a growing trend of landlords signing their assets over to third party operators and I suspect this is set to continue.
The answer, partly lies in the document you signed before handing over the keys.
It is important that any contract stipulates the requirement for the third party operator to return the property with vacant possession.
However, it is also important to recognise the process involved in gaining vacant possession and note that timescales to achieve vacant possession can exceed the notice period.
If the contract is not possible to be performed, then it could be deemed unfair terms or frustrated.
A well worded contract would give the operator reasonable time to achieve vacant possession or have some provision in the event that the contract terminates without vacant possession, such as a lump some payment or an increased rent after a reasonable time (e.g.12 months)
One further problem is that the tenants may have been housed on a short term licensed arrangement but gained statutory AST status through the substance of the arrangements. In such instances, the tenancy compliance documentation is likely to be incomplete and eviction could be delayed further as a result.
In my groups, I caution those entering such arrangements to fully understand who the end occupier will be, whether circumstances outside your control will breach your mortgage or insurance terms and to recognise that a signed piece of paper is no more than a signed pice of paper. Enforcing the contents of the piece of paper is a different ballgame!... Read More

Assuming you are legally correct, you face a disadvantage in that you are committed to the tenancy for three years and cannot issue a possession notice within that period. I appreciate you are looking for long term income (who isnt?), but with a new tenant you have unknowns regarding anti social behaviour and rent payment reliability. Other legislative hurdles, unknown today may change your view on the investment. Most people want the ability to liquidate their investments at reasonable notice to accommodate unexpected personal life changes. Apart from anything else you will be reducing your pool of willing tenants with this arrangement. The one certainty in life is change. If the tenant loses their income stream, no contract is going to magic the rent into your bank account. I doubt a rent guarantee insurer will cover your contract and if so, it would be limited to 9 months of rent normally. Best to go with the normal. Tribunal judges are far more familiar with normal.... Read More

the story illustrates that many, probably most sa owners are on the wrong product but the upcoming licensing will mean that to continue, it is necessary to have a sa compliant mortgage... Read More

VAT is based upon the type of supply. Long term letting is exempt. Short term letting is a vatable supply. There are more detailed rules regarding this supply, for example letting for more than 30 nights becomes exempt. FHL is income tax, by scrapping FHL there is no automatic assumption the vat position will change. Long term investors with commercial elements to their portfolio are familiar with dealing with VAT on long term lettings. What will become a consideration is the incorporation of a serviced accommodation business. For vat reasons amongst others, it would be best to be kept in a different limited company than a long term let portfolio, but the opportunity to switch use and therefore move assets between companies will require specific structuring.... Read More

It is pretty clear in the gov website summary. FHL will be abolished and the treatment of the income will now be the same as long term lettings. FHL is income tax only. Corporation tax is unaffected. Of course more detail may be announced, but that is the position today.... Read More

I certainly have noted a shift in Michael Gove’s attitude to policy as more time passes since his dialogue with NRLA.

He is prioritising vote winning comments over sense.

We can expect some vote winning actions such as the scrapping of S21 during 2024.

But this is an issue where the cause can be either due to tenant behaviour or the building management. Often a combination of the two.

Sensible landlords who wish to manage risk will be putting into place actions to minimise the opportunities for damp and mould growth and these will provide a more robust defence to tenants and local authorities.

Actions include addressing the heating and insulation opportunities in vulnerable areas, installing the very effective PIV units, ensuring there is adequate ventilation (regularly cleaned trickle vents), support with dehumidifiers if necessary and educating tenants in measures to minimise the risk of damp and to treat mould when it is apparent.

HMO landlords that have converted houses to all en suites need to recognise that the houses now generate a huge amount more water internally and somehow that has to get out into the atmosphere.... Read More

The whole issue simplified:

Property investors can legally purchase property in personal name. Alternatively, they can legally purchase property via ownership of a limited company. They can legally transition between the two and there are transitional tax reliefs available and designed for the very purpose if they meet certain criteria.

In some, but not all circumstances, transitioning to a limited company reduces the overall tax bill. Limitation of liability, succession planning, professionalisation of the business and access to finance are four main reasons to transition to a limited company that have no bearing on tax.

Nobody is disputing the above.

So what is so morally repugnant about such a transition that serves to level the tax playing field amongst property investors?

P118 has been attacked for one reason alone. Because they facilitate the above for many landlords and advertise to landlords that such transitioning is possible and affordable.

There are those that are anti landlord and anti wealth that will look to gain recognition in society by leveraging such sentiments. Such folk often point to altruistic motivation to mask their true motivation which, without exception, is driven by objectives that are either financial, career or egotistic. Nearly all those that join in with written support can be linked to some form of gain from the reduction of the success of P118.... Read More

This protects the agent commission in the event of rent default by the tenant. The landlord would be liable to pay the agent commission.

It may also enable the landlord to get rent guarantee insurance.

However, the insurer would fund the rent to the landlord then claim the arrears from the landlord.

Bizarre indeed.... Read More