Here is a round-up of the topical tax issues for property ownership from our team of specialists
25 May 2021
Trust registration for tenants
Couples who buy a new lease as joint tenants and then have a liability to pay stamp duty land tax (SDLT), or the Scottish or Welsh equivalent, may be unaware that they are obliged to register with HMRC’s Trust Registration Service. For an overview of trusts and taxes, there’s more information available on the gov.uk website.
Tax charge on lease extensions
Property lease extensions at anything other than full market value, where the lessees (tenants) are the shareholders of the company owning the property freehold, could expose both the lessees and the company to unexpected tax charges. The lessees should seek advice to be sure of their position before extending their leases.
Non-UK resident property disposals
Non-residents should remember that, as well as the disposal of UK property, the disposal of any size of holding or interest in UK real estate-rich collective investment vehicles has to be reported, and capital gains tax paid, within 30 days. If you would like advice or further information, please speak to your usual Shipleys contact.
Non-UK resident stamp duty surcharge
A new SDLT surcharge on non-UK residents buying residential property in England and Northern Ireland has been in force since 1 April 2021.
The surcharge is 2% above the existing residential rates. There are exceptions, including around who is deemed to be the ‘beneficial owner’ of the property, so prospective buyers should seek specialist SDLT advice before committing to a purchase.
Furnished holiday lettings and the pandemic
Properties that qualify as furnished holiday lettings can be treated as a business for tax purposes, but only if the property is actually let as furnished holiday accommodation for 105 days a year. However, if it is let for less than that time, for example because of Covid-19 restrictions, HMRC will allow a 'period of grace', provided it can be shown there was a 'genuine intention' to let the property and it was available. However, the property must have met the occupancy condition in the prior year. More from gov.uk here.
Can we help?
If you need further guidance about any of the tax developments outlined here, please speak with your usual Shipleys contact or one of our team of specialists shown on this page.
Specific advice should be obtained before taking action, or refraining from taking action, in relation to this summary. If you would like advice or further information, please speak to your usual Shipleys contact.
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