Property Tax can be a complex affair. Therefore it is important to make sure you fully understand the various types of property taxes that affect you.
At Alexander & Co we have a specialist property tax team who can advise on all aspects of property tax. We can assist with tax relating to purchases and disposals through to advising on more complex, larger transactions.
Our dedicated property tax accountants are also able to assist you in minimising your tax liability on your property investments.
Capital Gains Tax
Disposal of assets can result in significant tax charges; charges which may be reduced with effective pre-transaction planning. Our tax advisers can assist you in this planning and advise you on options to minimise your exposure.
You can read more about Capital Gains Tax and the services we offer on our dedicated page here
Stamp Duty Land Tax
Stamp Duty Land Tax (SDLT) is paid when you purchase property or land over a certain price threshold in England and Northern Ireland.
The current Stamp Duty Land Tax threshold for residential properties is £250,000 up to 31 March 2021. For non-residential land and properties, the threshold is £150,000. However, first time buyers, in England and Wales have a higher threshold.
Land Remediation Relief – reducing your property tax
Subject to certain conditions, Land Remediation Relief provides relief from Corporation Tax, providing a deduction of 100%, together with an additional deduction of 50%. This additional deduction is for qualifying expenditure that has been incurred by firms in cleaning up land that has been acquired in a contaminated state from a third party.
Qualifying expenditure includes those costs involved in establishing the level of contamination, in removing the contamination or in containing it (where the possibility of relevant harm is removed). The remediation work must however have been carried out to claim this relief.
Both capital and revenue expenditure are eligible for Land Remediation Relief, subject to conditions.
A company that makes a loss can surrender that part of the loss (that is attributable to Land Remediation Relief) in return for a tax credit. This must be made in a CT self-assessment or in an amended self-assessment.
Commercial Property and VAT
VAT on commercial property is a complicated area, whilst the sale of a commercial building or a lease is usually exempt from VAT, commercial property owners have the option to charge VAT on commercial property. Once taxed, this cannot be revoked, so careful consideration needs to be given.
The sale of new build commercial property is however liable to VAT.
There are advantages and disadvantages of VAT being applied to commercial property. You can read more about VAT on Commercial property in our article here
Annual Tax on Enveloped Dwellings (ATED)
Annual Tax on Enveloped Developments (ATED) is paid annually, mostly by companies that own UK residential dwellings, valued at more than £500,000.
For residential dwellings in the UK owned or partly owned by such entities, an ATED return will need to be completed, where the value is more than £500,000 (for returns from 2016 to 2017 onwards). It also applies for returns earlier than this, in cases where the value is more than £2 million (for returns from 2013 to 2014 onwards) and £1 million (for returns from 2015 to 2016 onwards).
This tax applies where the residential dwelling is owned completely or partly by either:
- A company
- A partnership in which any of the partners is a company
- A collective investment scheme
Returns are required to be submitted on or after 1 April in any chargeable period.
Reliefs and exemptions from this tax are available. In certain circumstances you will not need to pay anything. Alexander & Co can advise on this.
Since 6 April 2017, UK residential property held directly or indirectly by non-UK domiciled individuals falls within the scope of UK Inheritance Tax.
A non-UK domiciled individual could previously avoid this tax by holding UK property within a trust or company.
Whilst Inheritance Tax is not always considered at the outset of a property transaction, the structuring of a deal can have long term implications and to this end, early inheritance tax planning in always useful. Request a personal review from our specialist Inheritance Tax team to ensure your property is held in the most efficient way.
Property Tax advice for Individuals
We have a wide range of expertise in helping individuals and landlords with their property investments. Here at Alexander & Co, we can advise you from the very beginning, from structuring your deal to financing your project. Whether you’re a first-time buyer or frequent property investor, we can advise you on a number of different areas regarding property tax, including:
- Auditing, Tax and Accounting Services
- VAT and Property Related Tax Advice
- Tax Mitigation
- Sale and Leaseback Agreements
- Structuring the Deal and Advice
We can help you determine any tax or planning implications that may disrupt your property deal early on, helping you to tick all of the necessary boxes before finalising any property deal.
Property Tax advice for Residential Property
Entrusting a professional property accountant with your property portfolio is even more important than ever for the ever-changing world of property investment. Because of this, our team of trusted property accountants are here to help you with your residential property needs. We can help you ensure you are fully protected from any unforeseen circumstances. We can advise you on many areas of residential property such as Annual Residential Property Tax (ARPT).
Our property accountants can help relieve some of the burden and confusion of administration. At Alexander & Co, we make sure that you have more time and fewer jobs to worry about.
Property Tax advice for Commercial Property
Moving to a new commercial property or investing in your first home for your business can come with many stresses and burdens. Alexander & Co help you by taking away the commercial property administration, allowing you to focus solely on keeping your business up and running.
Our team of professional accountants can help you navigate the complicated world of commercial property, helping you to understand areas including:
- VAT on Commercial Property
- Capital Allowances
- Leasing or Selling Commercial Property
- Opt to Tax
- Transfer of Going Concern (TOGC)
Getting the correct advice is crucial in order to avoid costly mistakes. VAT and HMRC penalties can often cause a huge amount of financial damage, so we ensure you are fully protected from any of these threats.
Accountants and Property Tax advice for Landlords
We advise both residential and commercial landlords on different areas of property investment and property tax. As a landlord, you may have various properties that generate income and expenses. Because of this, team of property accountants can help you make the most out of your properties.
UK Tax advice for overseas landlords
How non-resident and overseas landlords are taxed on the properties they own in the UK has changed significantly in recent years. Additionally, this now also includes Capital Gains Tax, which can be charged on the sale of UK assets.
Other taxes which can apply include Stamp Duty Land Tax, Income Tax, Inheritance tax, Corporation Tax and Annual Tax on Enveloped Dwellings.
We regularly advice non-resident and overseas landlords, including UK citizens who are partly based overseas on these matters. Additionally and equally important, we work with a wide range of companies with a main office or business premises outside the UK or who are incorporated outside the UK on a wide range of tax issues, including property.
Please contact our specialist tax team to discuss how we can assist with issues arising from investments and properties held in the UK. Similarly, to discuss further other aspects of international tax as it applies to UK tax.
Additionally, you can download our guide ‘Investing in UK residential property as an overseas landlord’ here or contact us for further advice.
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