The Department for Levelling Up, Housing and Communities published a policy paper in May 2022 which detailed Council Tax changes as part of Levelling Up and Regeneration Bill. It was proposed, amongst other things, that there would be an increased Council Tax premium rate for second homeowners, such that local councils across England would be able to charge additional Council Tax on homes that are furnished but not used as a sole residence. The Levelling Up and Regeneration Bill focuses on the need to improve public services (especially in those places where they are lagging), restoring a sense of community and empowering local leaders. This announcement was welcomed by councillors and Conservative MPs in popular UK holiday destina...

The provision of living accommodation to an employee can potentially be a taxable benefit. The rules discussed below also apply to living accommodation provided for a member of an employee’s family or household by reason of their employment. The way that the benefit is taxed depends on whether the accommodation is job-related or non-job related, as well as other factors relating to the accommodation itself. Job-related Accommodation Where job-related accommodation is involved, there will be no charge to tax in the following circumstances: The job-related accommodation is ‘necessary’ for the proper performance of the employee's duties (e.g. caretakers on call outside normal working hours or agricultural workers who live o...

Domicile has historical routes for being known as one’s ‘home’. It is very important to understand your domicile status as this can have a number of tax consequences, especially in relation to UK Inheritance Tax (“IHT”). This article sets out where an individual can be deemed to be domiciled in the UK for IHT purposes and what this means for taxpayers. Please note that this article specifically relates to IHT and does not discuss Income Tax or Capital Gains Tax. What is Domicile? Domicile is a common law concept and can broadly be described as an individual’s permanent home and where they plan to live permanently or indefinitely. For further information on what domicile is and the different types of domicile, please tak...

The division of marital assets is a difficult time for most couples undergoing separation/divorce/dissolution, and little thought may be given to the potential tax implications that can arise. This article seeks to highlight some of these tax issues, and potential planning to help mitigate the potential tax charges and ensure that a larger pool of assets remains for apportionment between the parties. Capital Gains - Tax Year of Separation The transfer of assets between spouses/civil partners who are 'living together' in the tax year, is at no gain/no loss for capital gains tax. Individuals will be treated as living together unless they are separated under a Court Order or formal Deed of Separation, or they are separated in circumstanc...

The autumn budget was presented by the Chancellor of the Exchequer on Wednesday 27 October 2021, where for the most part few changes to the tax rules in the UK were announced. However, it was acknowledged in the budget that changes would be made to the Capital Gains Tax (CGT) Payment for Property Disposals (PPD) service rules. For further details on what the CGT PPD service rules are and whether they may apply to you, please consult our previous blog which provides details of this service. PPD Service Deadlines Previously, the government introduced new reporting requirements for UK residents disposing of residential property on or after 6 April 2020, where it was established that the deadline for taxpayers to report the disposa...

Landlords who let Furnished Holiday Lets (FHLs) can benefit from certain tax advantages. The rules that apply to FHLs are distinct and separate from the rules applying to the letting of residential property more generally. Furnished Holiday Lettings – Conditions For a property to qualify as an FHL in the tax year, all of the following conditions must be satisfied: The property is furnished. The property is located in the UK or the European Economic Area (EEA). The property is available for commercial letting as holiday accommodation to the public for at least 210 days in the relevant period (typically the UK tax year). Of the 210 days, the property is actually let out for at least 105 days as holiday accommodation. ...

With an ever-increasing demand for housing and a limited amount of land available, you may be considering whether a property could be built in your garden. Clearly, this could be very financially rewarding for you; however, there are some important tax considerations that you should bear in mind. This article will consider the potential capital gains tax and income tax implications of 1) selling part of your garden to a property developer, 2) self-building a property in your garden for onward sale and 3) self-building a property in your garden to let to tenants. 1)Selling part of your garden to a property developer If you sell part of your garden to a property developer who will develop the land and later sell the developed proper...

Multiple Dwellings Relief & Annexes: The State of Play   Multiple Dwellings Relief (“MDR”) was introduced by the Government in July 2011 such that a buyer can claim relief from Stamp Duty Land Tax (“SDLT”) where they purchase two or more dwellings in one chargeable transaction. This article is focused on taxpayers making the claim for MDR where they acquire a property with an annexe, rather than a number of distinct properties. The relief works through averaging the cumulative SDLT cost of a transaction across the number of dwellings acquired, where this should bring the SDLT rate closer to the rate applicable if the dwellings were acquired separately. However, the MDR can’t lessen the SDLT payable to below 1% of the...

Earlier this year, we published The Price is Right: Valuing Trading Companies (8 February 2021) which provided an overview of the various methodologies and principles typically used to value unquoted trading companies. In this article, we will set out how we value property investment companies and the kind of factors that must be considered in order to reach a robust valuation. When might a valuation be required? In our experience, valuations of property investment companies are typically required in the following circumstances: Inheritance tax planning Sale or transfer of shares Matrimonial proceedings Family Investment Companies It's important to note that this is not an exhaustive list, and a valuation may be requi...

The disposal of property is a chargeable event for capital gains purposes, therefore a liability to capital gains tax ("CGT") can arise. This is the case even if you swap your property for another property and no money changes hands. However, there is often overlooked CGT relief which applies where there is an exchange of interests in land which are jointly owned by two or more persons. For example, if a husband and wife are getting divorced and they are joint owners of two rental properties, roll-over relief may be available if the wife transfers her half of the first property to her husband in exchange for his half of the second property. The relief operates by treating the disposal as a no gain/no loss transaction, with the donee i...