Property Tax

Do you run a buy to let/property rental business?

Government legislation has increased ‘red tape’ and workload for landlords, with large fines introduced for those failing to abide by regulations. The removal of reliefs such as ‘wear and tear’ and ‘section 24 – mortgage interest relief’ now fully in place, have added further pressure on landlords. Post tax rental profits have been significantly reduced as a result of effectively being taxed on notional profits. As a result, it is getting harder to obtain buy to let mortgages where the interest, fees and loan to value ratio are needing to be more commercially viable. All this at a time when the equity being required from the borrowers is at an all-time high.

It is not just UK resident landlords that need assistance because overseas landlords are now impacted by the capital gains tax changes.

Landlords must also consider the impact of increasing property values on inheritance tax – the Charterhouse approach is to discuss this with you as part of your overall objectives and if this is a concern, we will factor this in to provide a flexible platform to meet your succession planning objectives.

Structuring your portfolio to achieve your objectives is a critical step for the future success of your business. Great care must be taken as it is full of pitfalls for the unwary, however with careful planning these traps can be avoided.

Undertaking a structuring exercise that only deals with a specific issue can leave you open to unintended consequences elsewhere within the structure, both tax and commercial, further down the line. For instance, it may be that you’d considered your capital gains position had been improved but in reality, the underlying liability was simply deferred or that you have an efficient corporate structure for the rental profits only to discover you face significant liabilities when extracting funds into your personal name. It could be that steps you thought you’d taken to allow to plan for future generations to become involved in the business have not had the desired outcome and you still face liabilities today when passing your wealth down.

Structuring your business efficiently is one of the most important steps you can take and although the issues faced in doing so are complex, the rewards for getting it right first time can be monumental whilst the consequence of getting it wrong don’t bear thinking about. It is therefore imperative that you seek not only professional advice but the right professional advice. Don’t just take our word for it, call us today for a free initial chat to find out more and see the difference for yourself.

To find out more about how Charterhouse’s unique and bespoke approach can help you and your business with property tax, please contact David White and complete our property questionnaire and email it to us to review.