HOWARD KILVINGTON SECRETARY CARDIFF LANDLORD FORUM MANAGEMENT COMMITTEE.

Slides:



Advertisements
Similar presentations
FURNISHED HOLIDAY LETS An Update - Know where you stand! From 6 April 2012 many of the favourable tax rules applicable to Furnished Holiday Lettings (FHLs)
Advertisements

Making More Out of Your Buy-to-Let Kelly Goodchild Tax Supervisor Streets Chartered Accountants The Bentley Hotel Friday 1 st November 2013.
Year End Tax Tips for Business Owners Tax Management is very critical, especially for small and medium-sized business. This presentation will provide.
Tax Lecture 3 Capital Gains Tax See chapters 6 & 7.
STYLUS Retirement Planning: Tax Presentation. Presentation Overview Investment Income Splitting Private Business Ownership Tax Planning Considerations.
University of Portsmouth Personal Finance for Accountants (U13763) Lecture 6 Personal Taxation.
Helping colleagues to identify planning opportunities from a complex fact-find Jane Gow FPFS Chartered Financial Planner 75point3 Chartered Financial.
Chapter 3. Personal taxation Company taxation Capital gains tax Other taxes Double taxation South African taxation.
Generally Accepted Accounting Principles
David Alcock Wednesday 12 th February 2014 Somerleyton Road project Stewardship options.
Accounting and the Business Environment Chapter 1.
 Special Elections And Post Mortem Planning.  Estate Planning after Death o Decisions made on the estate that Impact heirs Impact taxes Impact executor.
Chapter Objectives Be able to: n Explain the nature of the different types of property income. n Differentiate between the different methods of computing.
Maximising tax efficiency 22 November 2006 Eleanor Watts.
Concepts in Federal Taxation Chapter 8: Taxation of individuals
© OnCourse Learning. All Rights Reserved. Federal Taxation of Home Ownership Learning Objectives  Define and list examples of income tax deduction benefits.
SELF ASSESSMENT. ORDER OF PRESENTATION: 1.WHAT IS SELF ASSESSMENT (SA). 2.WHO ARE REQUIRED TO FILL OUT SA FORM. 3.FILING & PAYMENT DATES. 4.PENALTIES.
Structures for Investors Presented by: Kerrie-Anne Bailey KAS Tax & Business Solutions Phone: (07) April.
Chapter 9 Forming and Operating Partnerships Copyright © 2013 by The McGraw-Hill Companies, Inc. All rights reserved. McGraw-Hill/Irwin.
Types of organisation.
Sole trader and partnership tax Trading Income Application to partners VAT Stamp Duty.
© PKF (UK) LLP Ways for GPs to save tax Andrew Tiplady 26 March 2009.
Chapter 13 Basis Adjustments to Partnership Property.
FIVE HEADS OF INCOME Income under head salaries.
Taxation for Real Estate Investors Course Speaker Allan Madan, CA Tel:
Phil Cook FCA CTA Tax Partner Clement Keys. Personal Taxes  PA’s up £630 in 2012/13 for those under 65  Further increase of £1,100 in 2013/14  Benefit.
FIF’s and Pensions. Investing Offshore Involves a range of complex commercial and taxation issues. Added to usual issues with investment is the need to.
 Click to edit Master text styles  Second level  Third level  Fourth level  Fifth level  Click to edit Master text styles  Second level  Third.
Back to EU Member states Sweden Contents 1.Introduction – why buy real estate? 2.Contact details 3.Forms of property ownership 4.Taxes and other costs.
Real Estate Principles and Practices Chapter 16 Investment and Tax Aspects of Ownership © 2014 OnCourse Learning.
Presented by Louisa Norton ACA CTA Chartered Accountants | Business Advisers Landlord & Tenant Update: Changes that will affect you – Budget 2015.
Financial Accounting Fundamentals
1 - 1 ©2002 Prentice Hall, Inc. Business Publishing Accounting, 5/E Horngren/Harrison/Bamber Accounting and the Business Environment Chapter 1.
Real Estate Principles and Practices Chapter 16 Investment and Tax Aspects of Ownership © 2010 by South-Western, Cengage Learning.
Personal Holding Company Chapter 45 Tools & Techniques of Estate Planning Copyright 2011, The National Underwriter Company1 A personal holding company.
Firefighters’ Pension Scheme
PTAX Personal Taxation Income From Property (Rental Income)
Tax Planning Ideas for Companies John Rodger – Director of Corporate Tax Services Neil Norman – Corporate Tax Manager DATE.
Association Of Residential Letting Agents (ARLA) – Cornwall Stephen Maggs & Alex Reed Robinson Reed Layton Property Tax Overview and Update.
Swansea Landlord’s Forum 15 th March 2016 Jeannette McLellan Pylewell Rhossili
INCOME FROM HOUSE PROPERTY. INTRODUCTION This lesson deals with income, which falls under the head ‘Income from house property’. The scope of income charged.
NEWS FLASH!!! GOVERNMENT WAR ON LANDLORDS CAUSES BUYING FRENZY BEFORE April 1 st 2016.
Page 1 Friend Partnership Limited Eleven Brindleyplace, 2 Brunswick Square, Birmingham, B1 2LP +44 (0) Tax Planning for High Net Worth Individuals.
Wrekin Landlord Services Ltd The impact on landlords of the Summer Budget 8 th July The Tax Changes 2.The Welfare Changes 3.The Impact on the Housing.
C HANGES TO TAX FOR LANDLORDS Mike Bygrave. C HANGES TO TAX FOR LANDLORDS “Short of attacking them with flame throwers or impaling them on stakes it is.
Martin Wardle Robson Laidler Annus Horribilis. “Annus Horribilis” Martin Wardle Robson Laidler.
Tax Update for Landlords Rachel Addiss Tax Technical Manager PKF Francis Clark.
NLA NEWS and LEGISLATIVE UPDATE
 Tax Tips for Real Estate Investors With Allan Madan.
Agenda Introductions Tenant tax campaign Property income tax changes
AccountancyPlace.
Chapter 7 Investments.
©2007 Prentice Hall, Inc..
Rental Income Rental Income Irish rental income is taxed under Case V.
Corporation Tax Other income Case III, IV, V, and chargeable gains
Forming and Operating Partnerships
Caerphilly Landlord Forum
CASE: DANISH FAMILY COMES TO BARCELONA GMN Congress, Verona 2015
300 North Road, Cardiff, CF143BN
Forming and Operating Partnerships
Prepare Tax Documentation for Individuals
Chapter 7 Investments.
Forming and Operating Partnerships
Tax for the Private Client
Landlord Tax T: E: W:
By Cotswold Barristers
Buy to let property – Update
Chapter 7 Investments.
© OnCourse Learning.
Tax Tips for Residential Landlords June 2019
Presentation transcript:

HOWARD KILVINGTON SECRETARY CARDIFF LANDLORD FORUM MANAGEMENT COMMITTEE

Annual General Meeting 2015 Mission Statement 1. The Aims and objectives of the CLF are to educate and to inform landlords of Cardiff and to provide avenues of communication with officers, council members and external bodies and to provide a common voice in the service of the membership. 2. To work with Cardiff Council and other partners to improve services within the private rented sector and to develop the sector to the benefit of landlords, tenants and the community at large. The Committee The Committee has a membership of nine including the Chair and Vice Chair and membership is open to Cardiff Landlords who have attended at least three general Meetings since the last year. There are currently three vacancies and nominations must reach the Chair’s offices at James Douglas by 28 th October. Nominations must be seconded by another member of the CLF, but if it is not convenient for you to obtain a nomination, qualified candidates are able to be nominated by a member of the Committee on receipt of the form. Details are on the nomination forms.

Committee Activities Meetings are held before most General CLF meetings Handles all aspects of the administration of the CLF Considers and arranges speakers for the General Meetings Facilitates meetings timetable, conference rooms bar and other requirements. Represents the CLF on many important policy making bodies of Welsh Government and Local Government. Considers and formulates responses to the many consultations of Property Letting from Government. The work of the Committee is vital to the successful and continued operation of the Forum and we need new Committee members to join us in ensuring this continues. SEND YOUR NOMINATIONS TO: James Douglas, 1 St Martin’s Row. Albany Road, Cardiff. CF24 4RP Or or

Scrutiny Committee Meeting on the Closure of Wedal Road Recycling Site 26 th August 2015 Douglas Haig represented the interests of the CLF as a speaker at the meeting of Cardiff Councillors at the meeting to consider the decision to close Wedal Road in favour of Lamby Way/Bessemer Road. Landlord Accreditation Wales is changing. From Autumn this year it will be replaced by Rent Smart Wales. Landlords who have qualified with the Wales Accredited Landlord Scheme will have little additional extra do do after being passported into the Rent Smart. The bar is open following the meeting for networking

Recent Tax Changes and the Implications for Landlords

Contents Mortgage interest relief Rental property in limited company Wear and tear allowance Private Residence Relief Tax tips Questions

Mortgage Interest Relief Current system – mortgage interest and finance costs fully relieved No change for basic rate taxpayers Higher rate relief being phased out over four years from April 2017 New rules include other finance costs Only affects Individuals (Corporation tax 19% in 2017) Restriction does not apply to furnished holiday lettings

The phasing out period will commence April 2017; landlords will obtain full relief on 75% of their finance costs and the remaining 25% will be subject to a basic rate tax deduction. Example: Jane incurs £3,000 of mortgage interest on her buy to let during 2017/18. There will be an allowable deduction of 75% of this which equates to £2,250, plus a reduction in her income tax liability of £150 (£750 x 20%). The phasing out period will then continue as follows: 2018 to % finance costs full deduction and 50% given as a basic rate tax reduction 2019 to % finance costs full deduction and 75% given as a basic rate tax reduction 2020 to all financing costs will be given as a basic rate tax reduction The Phasing Out Period

Example: Current rules Jean has an annual salary of £60,000 and taxable rental income of £8,000. Therefore total taxable income of £68,000 taxed as follows (assuming that in 2020/21 the personal tax allowance is £12,000 and the basic rate band is £38,000): £12,000 at 0%0 £38,000 at 20%£7,600 £18,000 at 40%£7,200 Total tax £14,800

Same scenario when applying new rules If we assume that Jean’s interest expense is £6,000, we add this back to the rental profit giving taxable rental income of £14,000 and total taxable income of £74,000: £12,000 at 0%£0 £38,000 at 20%£7,600 £24,000 at 40%£9,600 Total tax £17,200 Less tax relief on interest: £6,000 at 20% = £1,200 Total tax£16,000 Increase in tax due to basic rate restriction: £1,200

The basic rate tax reduction on the portion of finance costs not deducted in calculating the profit will be calculated as 20% of the lower of the: the remaining finance costs (as seen) profits of the property business in the tax year total non-savings income that exceeds the personal allowance any excess finance costs may be carried forward to following years if the tax reduction has been limited to 20% of the profits of the property business in the tax year Basic Rate Deduction

What are the options for Landlords ? Sell the rental properties Transfer ownership, for example to a spouse who’s a basic rate taxpayer Transfer the property into a limited company (stamp duty land tax, Capital Gains Tax, new mortgage) Do nothing and suffer the tax increase

Rental property in limited company Control ownership and how much income you withdraw Children or grandchildren shareholders of the company More retained profits for next purchase Corporation tax at 20%/19%/18% Down sides: Stamp duty land tax on transfer, if applicable ATED – annual tax change on enveloped dwellings Difficulties obtaining mortgage Double tax charge CT on profits and IT on dividends

Wear and Tear Allowance Announced in the Summer budget that the wear and tear allowance for furnished lettings would be abolished. HMRC have now published a consultation document which “seeks views on replacing the wear and tear allowance with a new relief that allows a deduction for the actual costs of replacing furnishings in let residential properties.” Currently wear and tear allowance applies to furnished lettings only The new allowance will be available to landlords of furnished, part furnished and unfurnished lettings

The new allowance will give relief for the items covered by the wear and tear allowance, but only when replacements are purchased. Items covered include: movable furniture or furnishings, such as beds or suites televisions freestanding fridges and freezers carpets and floor coverings curtains linen crockery or cutlery beds and other furniture

New relief - cost of the replacement less any proceeds from sale of second hand item. If replacement asset has an improvement element then relief will only be given for the value of the replacement element. HMRC example: Replacing a washing machine with a washer dryer is an improvement. If the washer dryer cost £600, and the cost of buying a new washing machine like the old one would have been £400 then the replacement furniture relief will be £400 (£600 less the £200 that represents the difference in cost between a washing machine and the washer dryer)

The repairs regime will remain unchanged Integral fixtures that are not normally removed by the landlord in the event of a sale, such as baths, washbasins, toilets, boiler and fitted kitchen units – these will still be deductible as a repair Lose the confusion between furnished and unfurnished The changes are not applicable to those with furnished holiday lettings or commercial property lettings. The current capital allowances regime will still apply in these cases

Comparison EXPENDITURECurrent RulesFrom April 2016 FurnishedUnfurnishedFurnishedUnfurnished CarpetWear & tearNo reliefActual cost Freestanding fridgeWear & tearNo reliefActual cost RedecorationRepair Replace boilerRepair CurtainsWear & tearNo reliefActual cost Fitted kitchen unitRepair BathRepair Roof repairRepair

Private Residence Relief (PRR) Capital gains tax relief when you sell a property that you have occupied as your main residence Capital gains tax is reduced by principle private residence relief Relief given for periods of deemed occupation halved to 18 months last year PPR election Lettings relief, up to £40,000 per person

Tax Tips Split investments with spouse Deed of Trust Beneficial Ownership, Form 17 Enterprise Investment Scheme (EIS) Take out cash for purchase and capital gains exemption Defer capital gains tax on gains Income tax relief at 30% current year or carry back to previous year Pension contributions and gift aid – increase BR band

Thank you for your attention Any questions?