CGT Changes and Furnished Holiday Lets by Letting Focus

There is still a considerable clamour on the chancellor to amend his plans on changes to simplify capital gains tax to make it more palatable to businesses.
We will have to wait and see – but I don’t think much will change – as there will be too much political face to be lost if Darling changes things now.

Furnished Holiday Lets
One class of investors who lose out is people with furnished holiday lets. Unlike buy to let investors, who generally gain under the proposed move to an 18% flat capital gains tax rate, owners of furnished holiday homes will lose out.
This is because they are treated just like any other business and currently get a different more generous type of taper relief called Business Asset Taper Relief (as opposed to the “Non Business” version that applies to buy to lets).
With this only 25% of the gain was taxable after owning for 2 years or more – giving a higher rate taxpayer a rate of effectively just 10% to pay.
With the new flat of 18% rate, they will pay more from April 5th 2008.
Then again, there could be a compensating factor at work here too. As a result of the lower CGT rates on second homes, more people will buy second homes for themselves. This could increase the value of houses in rural and coastal areas - just those places where where there are many holiday lets.

ABOUT DAVID LAWRENSON and LettingFocus
We are LettingFocus.com - the property letting experts and I’m David Lawrenson, the author of “Successful Property Letting” - the UK’s top selling property and buy to let book for the last 3 years.
I have been a landlord and property investor myself for over 25 years.
At LettingFocus we offer independent unbiased buy to let information for investors at our seminars as well as one to one (or two) focussed consulting advice covering all aspects of being a landlord and investing in property.
Unlike many in the still largely unregulated buy to let and property “advice” business we are not linked to a property company, developer, estate agency or bridging loan provider and so can be relied on for unbiased and independent advice on where to buy (which areas), what type of property to buy, when to buy and how to buy property at a low price. I can also explain how to reduce the risk of getting a bad tenant.

CHECK OUT THESE PAGES AT OUR SITE LETTINGFOCUS.COM:
Our Events only take place twice a year.
For our NEXT SEMINAR AND NETWORKING EVENT for Landlords and Property Investors click here:
Next Property Investing Seminar and Networking Event
We have GREAT OFFERS for landlords too, Click here: Services and Products for Landlords to see our Landlords Resources (Useful Links) page. (Selling services to landlords and property investors and have a national coverage? You could be a partner, please get in touch!)
For general info on our SEMINARS AND CONSULTING click here: Property Seminars, Networking Evenings and Consulting
ONE TO ONE CONSULTING click here: Property Consulting
CLIENT TESTIMONIALS from past customers click here: Testimonials
BUY THE BOOK click here: Buy the Book at Amazon
THE HOME PAGE OF THIS BLOG click here: Blog
THE HOME PAGE OF OUR MAIN SITE click here: LettingFocus Home Page
To JOIN our Free QUARTERLY NEWSLETTER simply send an email to david@LettingFocus.com - Please note we WILL NOT send spam or sell our mailing list to advertisers!

IF YOU HAVE A WEB SITE FOR LANDLORDS WHY NOT LINK TO THIS BLOG OR TO OUR WEBSITE?

Worried about becoming a victim of credit fraud and ID fraud?
Read this interesting article from our Articles page: http://www.lettingfocus.com/pages/myarticles12.html

Keep Up to Speed
To keep up to speed on latest blogs, over on the right hand side under all the previous blog entries you will find a button which says “Site Feed.” Simply copy the site feed link into your News Reader or News Aggregator.
If you have a website & are thinking of reproducing material here, that’s fine but we DO require a link to the blog to be included, including also all the links in this section. (The full article including all links must be available to ALL VIEWERS of your site and not restricted.)

TO VIEW RELATED POSTS select a “Category” at the bottom of this page.
WANT TO ADD A COMMENT OR VIEW OLD COMMENTS?
To add a comment to this post, simply click on “link to this post” to add your comment and to view comments of other people.
Copyright: David Lawrenson 2007. This blog is updated at least once a week

Landlords Given a Huge Tax Windfall says Letting Focus

It’s hard to believe this but thousands of property investors were among the winners from yesterday's pre-Budget report, after the Government unveiled plans to slash the rate of capital gains tax from 40 to 18 per cent.
Currently, higher rate taxpayers are taxed at 40 per cent on any gains above £9,200 in any one tax year – although using taper relief, this rate can be reduced to as little as 24 per cent on assets held for 10 years or more (or 12% for lower rate taxpayers) .
CGT hits residential buy-to-let landlords who sell their properties, as well as wealthier individuals who realise capital gains when selling any type of share investment.
But from 6 April next year, all capital gains above the personal allowance of £9,200 will be charged at a flat rate of 18 per cent – while taper relief (and the old indexation relief for pre 1998 purchases) will be scrapped.
And this applies retrospectively, so if you are a higher rate taxpayer (and for those lower rate taxpayers who bought less than 4 years ago), the best thing to do if you are thinking of selling now is – don’t. You are best selling next year after April 6 when you will pay less a lot less CGT.
Many individuals will no longer need to hold on to their assets for many years to minimise their tax.
I can hear a gnashing of teeth from some of my good friends who think landlords should be taxed harder (including the Institute of Directors and the Guardian newspaper) who say that landlords should be taxed more not less – including having their ability to set off interest on loans for buy to let property as a cost - removed.

ABOUT LETTINGFOCUS.COM and DAVID LAWRENSON
We are LettingFocus.com - the landlords’ expert and I’m David Lawrenson, the author of “Successful Property Letting” - the UK’s top selling property and buy to let book for the last 3 years.
I have been a landlord and property investor myself for over 25 years.
At LettingFocus we offer independent unbiased
seminars for buy to let investors and landlords as well as one to one advice covering all aspects of being a landlord and investing in property.
Unlike many in the still largely unregulated buy to let and property “advice” business I am not linked to a property company, developer, estate agency or bridging loan provider.
As such I am able to give unbiased independent advice on where to buy (which areas), what type of property to buy, when to buy and how to buy property at a low price. I can also explain how to reduce the risk of getting a bad tenant.

AT OUR SITE LETTINGFOCUS.COM:
Our Events only take place twice a year.
For our NEXT SEMINAR AND NETWORKING EVENT for Landlords and Property Investors click here:
Next Property Investing Seminar and Networking Event
We have GREAT OFFERS for landlords too, Click here: Services and Products for Landlords to see our Landlords Resources (Useful Links) page. (Selling services to landlords and property investors and have a national coverage? You could be a partner, please get in touch!)
For general info on our SEMINARS AND CONSULTING click here: Property Seminars, Networking Evenings and Consulting
ONE TO ONE CONSULTING click here: Property Consulting
CLIENT TESTIMONIALS from past customers click here: Testimonials
BUY THE BOOK click here: Buy the Book at Amazon
THE HOME PAGE OF THIS BLOG click here: Blog
THE HOME PAGE OF OUR MAIN SITE click here: LettingFocus Home Page
To JOIN our Free QUARTERLY NEWSLETTER simply send an email to david@LettingFocus.com - Please note we WILL NOT send spam or sell our mailing list to advertisers!

LIKE THIS? THEN WHY NOT LINK TO THIS BLOG OR OUR WEBSITE?

TO VIEW RELATED POSTS select a “Category” at the bottom of this page.
WANT TO ADD A COMMENT OR VIEW OLD COMMENTS?
To add a comment to this post, simply click on “link to this post” to add your comment and to view comments of other people.
Copyright: David Lawrenson 2007.

Flat Conversion Allowance - How to Make Money from The Space Above a Shop - and Get the Taxman to help out too.

Here is some useful property tax advice.
Did you know that under the Flat Conversion Allowance scheme you can get income tax relief on the cost of converting or renovating the empty space above a shop, café, office or surgery and turning it back into use as residential flats?
However, as always with such a nice tax break, there are some rules.
In order to qualify for the allowance, the money spent has to be on things of a “capital nature” so whilst you can claim for the cost of dividing the property to create separate flats or installing a new kitchen or bathroom, you won’t be able to claim the cost of providing furnishings.
There are also rules about the type of building that qualifies.
The property that is being converted must be in a shopping street, have no more than 4 storeys and the building must have been built before 1980 with the original intention that the upper floors be used as residential accommodation.
The space above the shop or office must have been either empty or used only for storage, for at least the last year.
When the conversion is complete you must let the flats out to tenants and the ground floor must continue to be used for business purposes both during and after the conversion.
Finally, each new flat has to be self-contained and access to the street from the flats has to be separate from the ground-floor premises.

More Rules
The rules say that expenditure does not qualify for he allowance if any flats created are "high value" flats, which the Revenue defines as flats which, “when the conversion or renovation work starts would be expected to achieve rents above set limits.” This is approximately £350 per week in London and £150 outside London.
You have to own the property and let it out for seven years after conversion because the allowance can be withdrawn if you sell the flats or the flats stop being used for letting during this period.
Making a claim is easy though.
You simply claim for the flat conversion allowance in the tax return for the year in which the conversion or renovation money is spent - and there are no special requirements beyond the usual self assessment.
The allowance is 100 per cent in the year in which the expenditure happens or if you prefer, you can claim a lower amount, with the balance of the cost spread over later years.
It’s possible to set the allowance against other income from property and if you don’t have enough property income in that year, the excess capital allowance can be carried forward and set off against future property profits.
Alternatively, excess capital allowances may be set against the person's other income for the year, or the following year.

ABOUT US

At LettingFocus.com is the home of landlord information.
Hello, I’m David Lawrenson.
I have been a landlord and property investor myself for over 25 years and am author of “Successful Property Letting” – which has been the UK’s top selling property and buy to let book for the last 3 years.

We help landlords and property investors make money in property by coaching them in ways that work, which are ethical and which involve minimal risk to the investor.
We pride ourselves on giving independent unbiased buy to let advice on a one to one mentoring and coaching basis as well as through occasional group seminars.
Unfortunately, in the UK today, property advice in the UK is still largely unregulated and what counts as “good advice” is too often more about making the promoter money than giving useful information to the investor.
With no links to property firms, developers or bridging loan providers we can advise on where and what type of property to buy for investment and when to buy it.
We also show you how to manage tenants properly.
We also do consultancy for banks, local authorities and social housing providers – helping them with their landlord facing or buy to let product strategies. We also write for property websites and are regularly quoted by the media.

AT OUR WEBSITE LETTINGFOCUS.COM:

THE HOME PAGE OF THIS BLOG click here: Blog
THE HOME PAGE OF OUR MAIN SITE click here: LettingFocus Home Page
ONE TO ONE PRIVATE CONSULTANCY click here: Property Mentoring
NEXT SEMINAR AND NETWORKING EVENT for Landlords and Property Investors:
Next Property Investment Seminar and Networking Event
We have OFFERS on a range of services and products for landlords too; click here including landlords insurance, tenant referencing, tenancy agreements and more: Services and Products for Landlords
For general info on our SEMINARS AND CONSULTING click here: Property Seminars, Networking Evenings and Consulting
TO READ CLIENT TESTIMONIALS – both commercial and private click here: Testimonials
BUY “SUCCESSFUL PROPERTY LETTING” click here: Buy the Book at Amazon plus anything else you fancy at Amazon.co.uk

To JOIN our Free QUARTERLY NEWSLETTER simply send an email to david@LettingFocus.com - Please note we WILL NOT send spam or sell our mailing list to advertisers!

IF YOU HAVE A SITE WHY NOT LINK TO THIS BLOG OR OUR WEBSITE?
SELLING SERVICES TO LANDLORDS – YOU COULD BE A PARTNER ON OUR AFFILIATE PROGRAMME. PLEASE GET IN TOUCH!

See our Twitter page: http://twitter.com/LettingFocus

Copyright of Blog: David Lawrenson 2007. This blog is updated roughly once a week usually on a Monday or Tuesday.

WANT TO BE KEPT UPDATED WITH OUR LATEST BLOGS?
Over on the right hand side under all the previous blog entries you will find a button which says “Site Feed.” Simply copy the site feed link into your News Reader or News Aggregator.
If you have a website & are thinking of reproducing material here, that’s fine but we DO require a link to the blog to be included, including also all the links in this section. (The full article including all links must be available to ALL VIEWERS of your site and not restricted.)

TO VIEW RELATED POSTS select a “Category” at the bottom of this page.
WANT TO ADD A COMMENT OR VIEW OLD COMMENTS?
To add a comment or view other people's comments on this post, simply click on “link to this post.”