A recent report from the Council of Mortgage Lenders showed that loans to landlords in April 2014 were 57% higher in value than they were compared to April 2013 and there was a 43% increase in the number of loans. Perhaps even more dramatic were official figures showing that house prices in England and Wales increased in April this year rising by 6.7% compared with the same month last year, with London house prices increasing by 17%.
For accounting periods beginning on or after 1 January 2015, FRS 102, based on the International Financial Report Standard for Small and Medium-sized Entities, will replace UK GAAP. This will have a big impact on the financial statements for many entities who have historically prepared accounts under UK GAAP, including key changes in the way investment properties are accounted for.
While it was tempting to discuss the recent European election results and Europe’s apparent disillusionment with the EU, I thought I would write about something a bit closer to home, the election of India’s Gujarati Prime Minister, Narendra Modi.
The announcement that HMRC have raised £23.9bn in additional tax during the 2013/14 tax year from tax investigations inspired us to examine our own client experience in the light of this crackdown on tax avoidance and non-payment of tax. HMRC said of the total amount it had raised, more than £8bn came from large business, £1bn from criminals and £2.7bn from tackling avoidance schemes in courts.
Where you have one or more properties that are let out to third parties on a commercial basis, you are regarded as carrying on a "property rental business". Interest paid on loans taken out for the purpose of purchasing or improving a property that is part of a property rental business is fully deductible for tax purposes against the rental income. By contrast, interest paid on loans used to purchase a private residence is not deductible for income tax purposes. Given the recent spike in property prices, it is tempting to refinance a loan on a property that is let out and use the proceeds to reduce the loan on your private residence, thereby maximising the deductibility of your total interest bill for tax purposes. Does such a strategy work?
Do you know how much free publicity you get from entering awards?
We recently underwent a review of our presence in the media and astonishingly, our entries into business awards over the last few years have given us national press coverage... and we didn't even know about it.
Since the budget, it has been a hot topic of conversation that in the future, HMRC may be allowed to access bank accounts (including ISAs) for the direct recovery of debts. Many people are very worried about this, with the main concern being that "tax officials have a history of making mistakes".
There was chaos on the streets of the capital for the last 48 hours as the tube strike reached its full effects. Much of the underground in central London had to close due to the strike with just a couple of stations and lines running. The lack of an underground service forces many commuters to find an alternative means of getting to work; clogging up the already congested roads and over ground stations.
When properties and other long-term assets are sold, a Capital Gains Tax (CGT) charge is normally payable on the profit made. However, a special relief is available where the property sold has been the main residence of the owner throughout the period of ownership. This is principal private residence (PPR) relief, and it is a 100% relief. That means that when you sell your home, you will generally not owe any tax on the property’s increase in value. If you have always lived in the property and do not own another private residence, the relief is straightforward. However, it is important to understand the rules and laws surrounding it.
The hustle and bustle of London life has been an attraction for a couple of years now, so when the opportunity came to work at WSM and relocate to London I jumped at the chance. Coming from Nottingham, London seems enormous and can appear quite intimidating; one of the surprising things I first noticed was the constant mass of people all rushing to different places, and this seems to continue throughout the day. Working in Wimbledon is perfect as it is busy but not quite as intense; the commute in the opposite direction means I can avoid the crush of suits on the tube in the mornings!