How many of these ‘business’ hallmarks can you tick off the list?
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If you are hoping to incorporate your rental property portfolio and to roll CGT crystallised into shares in the company you are incorporating into then you will need to qualify for relief under s162 TCGA 1992. The main qualifying criteria for this relief is that HMRC accept that you are running a business.
How many of these questions would you feel comfortable answering if an HMRC inspector was to ask:-
What is your business name?
Does your business have its own Unique Tax Reference number “UTR”?
Do you have a bank account in your business name?
Do you have business letterhead?
Do you have a business telephone number?
Does your business have a website?
Do you have a business email address?
Does your business have an office?
Do you have business cards?
Does your business have any employees?
Does your business have a balance sheet produced regularly?
Does your business produce management accounts?
You don’t have to have all of these things in place to qualify for incorporation relief but if you have none of them HMRC are more likely to consider that you are curating an investment portfolio than running a property rental business.
I’m not saying they are right but perceptions could prove to be important if you are hoping to incorporate your rental property portfolio and claim incorporation relief to roll CGT crystallised upon incorporation into shares in the company you are incorporating into.
If you are considering incorporation or you need some guidance on the optimal tax structure for your business please click on the button below.
Show Tax Consultation Booking Form
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HMRC perceptions, how many of these business hallmarks can you tick off the list?
If you are hoping to incorporate your business and to roll CGT crystallised into shares in the company you are incorporating into then you will need to qualify for relief under s162 TCGA 1992. The main qualifying criteria for this relief is that HMRC accept that you are running a business.
How many of these questions would you feel comfortable answering if an HMRC inspector was to ask:-
What is your business name?
Does your business have its own Unique Tax Reference number “UTR”?
Do your have a bank account in your business name?
Do you have business letterhead?
Do you have a business telephone number?
Does your business have a website?
Do you have a business email address?
Does your business have an office?
Do you have business cards?
Does your business have any employees?
Does your business have a balance sheet produced regularly?
Does your business have management accounts?
You don’t have to have all of these things to qualify for incorporation relief but if you have none of them HMRC are more likely to consider that you are curating an investment portfolio than running a property rental business.
I’m not saying they are right but perceptions are important if you are hoping to incorporate your rental property portfolio and claim incorporation relief to roll CGT crystallised upon incorporation into shares in the company you are incorporating into.
Show Tax Consultation Booking Form
The post HMRC perceptions, how many of these business hallmarks can you tick off the list? appeared first on Property118.
View Full Article: HMRC perceptions, how many of these business hallmarks can you tick off the list?
Tenant blackmailing to allow viewings?
We have had rented out our apartment for just over a year now, the tenants have been an absolute nightmare and we have spent a small fortune on redecorating, installing fans, plastering walls etc etc, so we have decided to serve the tenants notice.
We have instructed a new agency as we feel the old agent’s property management could of handled the tenants expectations a lot better. The new agent has since contacted the tenants regarding viewing times and has received the following:-
“Dear Sir or Madam,
I am writing to you regarding your request for viewings.
As it is currently longer than 28 days, you as letting agents have no right to request.
You, as a representative of the landlord cannot guarantee or promise a pre-contract/contract to any prospective tenants for a start date to commence circa 2nd September as you are in no position to assure your prospective tenants that the flat will be available on the aforementioned date ie. Eviction processes/court proceedings might or might not be months in the making. It would be unwise for yourselves to allow viewings for this premises before the legitimate lease end date (2nd September 2017). Neither the landlord nor yourselves representing the landlord may ‘derogate from their grant’.
I appreciate that you are aiming for a seamless transition between us (the tenants in situ) and the prospective tenants so as not to lose the landlord monies.
However, as we are legally entitled to stay ‘undisturbed’ in ‘quiet enjoyment’ of this property until the 2nd of September we put this proposal to you:-
‘That we hereby promise to ensure reasonable and mutually agreed availability for viewings to this premises so as to help facilitate your search for prospective tenants between now (22/07/2017) and the lease end date (02/09/2017) based on the conclusion of a 50% discounted final month’s rent (£585.00p).’
We feel this is a fair amount when you consider the inevitable void of monies that would exist if you were to only allow viewings after our departure date.
Kindly confirm your position by return, this response via email.”
Now we know legally they do not have to allow access although the tenancy agreement somewhat states otherwise, but what they have responded with is clearly blackmail.
Is there anything I can do regarding this or will we just have to let the tenancy expire and wait for them to leave to begin viewings.
Clearly this is not ideal but I would rather lose money then allow my tenant to bend us over backwards like this.
If anyone can provide any advice it would be deeply appreciated.
We have contacted our property management company and they suggest waiting for the tenancy to expire.
Ignazio
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Landlord liability for water leak in tenement building with DSS tenant?
I have owned a first floor flat in an Aberdeen tenement building for 10 years with no problems but this year we had two leaks within a week both affecting the two properties below ours and the communal areas.
The first leak was caused by the washing machine and the second by a tap left on by the tenant.
The tenant at the time was the first ever DSS tenant in this flat and he had been upsetting neighbours for months by his drinking and several visits from emergency services.
My insurers advised that I could not be held liable for damages to the properties below and the owners would have to claim on their own insurance and that we would have to club together and pay the damages to the communal area.
As a gesture of goodwill we paid for the recarpeting of the communal area and all owners clubbed together for the repainting costs which were minimal per flat.
However, the owners of both flats on the ground floor are now claiming that as this was a DSS tenant I am liable for any damages caused. They tell me Aberdeen City Council and the Citizens Advice Bureau have confirmed this.
They are therefore asking me to pay the excesses on their insurance claims which total something in the region of £1500 and are threatening Small Claims Court Action if I don’t pay up.
This flat has never before been the source of any trouble and has been well managed by my excellent local agent. With both the leaks the agent acted immediately and liaised fully with the neighbours throughout and has also had the tenant evicted for his antisocial behavior.
I have asked my insurers for legal advice but would welcome any thoughts / advice from any of you lovely people please.
Many thanks.
Mandy
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Landlord Action calls for unregulated eviction companies to join a redress scheme
Over the years, Landlord Action has been instructed to take on several cases following the malpractice of other eviction firms. With repossessions for landlords now taking on average 43 weeks*, Landlord Action says landlords simply cannot afford to restart the process due to compliance errors. It is calling for unregulated eviction companies to become part of a redress scheme to help clean up the industry and protect landlords and letting agents from further unnecessary expense.
As the private rented sector has grown, so too has the eviction industry, and with it, the number of unregulated eviction firms cutting corners and not using legally qualified personnel to facilitate the process correctly. One landlord, Ms Romeena Hadwal, who like many people turned to the internet for advice when her tenant fell into arrears, found herself battling the very company she had instructed to help her. She comments: “I found a company on the internet which was offering what appeared to be a very good deal – £99 to get started and a money-back guarantee. I spoke to them on the phone, they seemed perfectly legitimate, explained the process to me, took payment and filed notice, which my tenant received. However, problems started when it transpired they had put the wrong address on the court forms, which delayed the entire process. Under the impression it had been resolved, the case went to court, but four weeks after the hearing, I was told I was unable to apply for the N325 ‘Request for Warrant of Possession’ because the address was still incorrect. I wish I had gone to a regulated law firm.”
Communication between Ms Hadwal and her eviction company became increasingly hostile until the firm stopped responding altogether. Six months on, she was still no closer to getting her property back and had paid a total of £855 to a company which had not helped to evict her tenant.
Commenting on unregulated eviction firms, David Smith, Partner and Head of Operations, Anthony Gold Solicitors says: “Unregulated providers of advice to landlords look like a good deal at first blush. However, they can provide advice which is misleading or plain wrong and the lack of insurance or a complaints process leaves landlords with nowhere to turn when things go wrong. A robust complaints mechanism is a key component of giving landlords confidence in the reliability of such services.”
With nowhere to take her complaint and mounting rent arrears, Romeena Hadwal was desperate to get her property back. Her only choice was to take the plunge and instruct another eviction firm. She contacted Landlord Action who took the case over, and Ms Hadwal now has an eviction date set for 1st August.
Paul Shamplina, Founder of Landlord Action says “When we set up as the UK’s original 3-step fixed-fee eviction company, the aim was to provide simplicity to a previously costly and complicated burden for landlords and letting agents. As other operators have entered the market place, we’ve found ourselves working with more and more landlords who have not only been let down by their tenant or letting agent, but subsequently their unregulated eviction firm. To improve standards and provide a better service, we acquired status as an Alternative Business Structure (ABS) in landlord and tenant law, authorised and regulated by the Solicitors Regulation Authority. This means if a landlord has a complaint, they can report it. But not all companies are regulated, so landlords have nowhere to turn if they have a complaint, and this needs to change. Belonging to a redress scheme would be the first step to making improvements and ensuring consumer confidence.”
Sean Hooker, Head of Redress, Property Redress Scheme added:
“Eviction is a highly technical skill that should be conducted professionally and sensitively. It is also an area where practitioners should be very aware of the service they provide to their customers. This is where access to redress comes in, allowing landlords and their agents to have their service complaints determined by an independent and impartial third party and things to be put right. The introduction of such a provision, will raise standards in the eviction world, provide customers peace of mind and confidence in the sector and increase the reputation and standing of those specialists that provide a necessary and valuable service.”
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Need advice on works done without consultation?
My Freehold landlord had several thousand pounds worth of work done on the building without any consultation with us. In fact we have NO idea any work was being done until we received a bill for thousands. We disputed the invoice and looked up advice online which said that the legal amount (under section 20 act) we needed to pay under legislation was £250 per leaseholder.
We own all 3 flats so we paid £750. Now we get a legal letter stating that irrespective of no consultation we are bound to pay the 60% of the bill.
However, if we feel we were prejudiced in any way we need to notify them and they will consider it, otherwise they want to take us to arbitration. They site “Daejan Investments Limited V Benson and Others. So, if we want to allege prejudice they want to know what prejudice we are claiming. Can someone advise?? really stuck here.
What baffles me is that they are basically saying they can spend whatever they want and never have to consult with us, inform us or tell us…surely this cannot be right?
Many thanks
Paul
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SDLT on linked transactions
Hi all, we are in process of buying 2 semi-detached house (adjacent ones) from a buyer in a single deal of £1.5M (£750K x2).
Our Solicitors have advised us that this will be treated as a linked transaction for SDLT and band rate of SDLT will apply on total consideration of £1.5M.
We will appreciate if anyone can suggest if they have gone through with such kind of transactions.
Many thanks
Sunil
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Eviction companies should join redress scheme…
Landlord Action, the eviction specialists are calling for unregulated eviction companies to join a redress scheme
Over the years, Landlord Action has been instructed to take on several cases following the malpractice of other eviction firms. With repossessions for landlords now taking on average 43 weeks*, Landlord Action says landlords simply cannot afford to restart the process due to compliance errors.
The company is calling for unregulated eviction companies to become part of a redress scheme to help clean up the industry and protect landlords and letting agents from further unnecessary expense.
As the private rented sector has grown, so too has the eviction industry, and with it, the number of unregulated eviction firms cutting corners and not using legally qualified personnel to facilitate the process correctly.
One landlord, Ms Romeena Hadwal, who like many people turned to the internet for advice when her tenant fell into arrears, found herself battling the very company she had instructed to help her.
She comments:
“I found a company on the internet which was offering what appeared to be a very good deal – £99 to get started and a money-back guarantee. I spoke to them on the phone, they seemed perfectly legitimate, explained the process to me, took payment and filed notice, which my tenant received. However, problems started when it transpired they had put the wrong address on the court forms, which delayed the entire process. Under the impression it had been resolved, the case went to court, but four weeks after the hearing, I was told I was unable to apply for the N325 ‘Request for Warrant of Possession’ because the address was still incorrect. I wish I had gone to a regulated law firm.”
Communication between Ms Hadwal and her eviction company became increasingly hostile until the firm stopped responding altogether. Six months on, she was still no closer to getting her property back and had paid a total of £855 to a company which had not helped to evict her tenant.
Commenting on unregulated eviction firms, David Smith, Partner and Head of Operations, Anthony Gold Solicitors says: “Unregulated providers of advice to landlords look like a good deal at first blush. However, they can provide advice which is misleading or plain wrong and the lack of insurance or a complaints process leaves landlords with nowhere to turn when things go wrong. A robust complaints mechanism is a key component of giving landlords confidence in the reliability of such services.”
With nowhere to take her complaint and mounting rent arrears, Romeena Hadwal was desperate to get her property back. Her only choice was to take the plunge and instruct another eviction firm. She contacted Landlord Action who took the case over, and Ms Hadwal now has an eviction date set for 1st August.
Paul Shamplina, Founder of Landlord Action says
“When we set up as the UK’s original 3-step fixed-fee eviction company, the aim was to provide simplicity to a previously costly and complicated burden for landlords and letting agents. As other operators have entered the market place, we’ve found ourselves working with more and more landlords who have not only been let down by their tenant or letting agent, but subsequently their unregulated eviction firm.
“To improve standards and provide a better service, we acquired status as an Alternative Business Structure (ABS) in landlord and tenant law, authorised and regulated by the Solicitors Regulation Authority. This means if a landlord has a complaint, they can report it. But not all companies are regulated, so landlords have nowhere to turn if they have a complaint, and this needs to change. Belonging to a redress scheme would be the first step to making improvements and ensuring consumer confidence.”
Sean Hooker, Head of Redress, Property Redress Scheme added:
“Eviction is a highly technical skill that should be conducted professionally and sensitively. It is also an area where practitioners should be very aware of the service they provide to their customers. This is where access to redress comes in, allowing landlords and their agents to have their service complaints determined by an independent and impartial third party and things to be put right. The introduction of such a provision, will raise standards in the eviction world, provide customers peace of mind and confidence in the sector and increase the reputation and standing of those specialists that provide a necessary and valuable service.”
*Figures released by Ministry of Justice May 2017
www.landlordaction.co.uk
About Nightmare Tenants Slum Landlords
With house prices soaring and the rental market over-heating, this series follows victims and villains on both sides of the buy-to-let battlefield. Eviction experts help frantic landlords as they attempt to grapple back their properties from nightmare tenants who won’t pay and won’t leave; and housing enforcement teams up and down the country do their best to protect vulnerable tenants who are living in squalor, at the mercy of slum landlords.
About Landlord Action
Landlord Action is a UK based organisation helping landlords, letting agents and other property professionals. As a champion for landlords, it has campaigned extensively and was instrumental in getting the law changed to make squatting a criminal offence.
It was founded in 1999 as the first ever fixed-fee tenant eviction specialist, they revolutionised this area of legal practice. They have now acted in more than 35,000 problem tenant cases and are considered the authority in this field.
Landlord Action run a free advice line to help landlords and property professionals understand their rights: 020 8 906 3838
www.LandlordAction.co.uk
About Paul Shamplina
Paul Shamplina is one of the key founders of Landlord Action with 25 years’ experience in the legal field. He has previously worked as a legal clerk, private investigator, debt collector and certified bailiff.
He has appeared regularly on TV and radio and lectures across the UK at landlord seminars and events and still works full time in the office, heading up the team of advisors.
Paul believes passionately in the rights of the landlord and is always available for comment on any landlord/tenant matters.
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Big is not always best in student accommodation
Student Lettings:
Government policy of late has been to dissuade small-scale buy-to-let investors from expanding their businesses in favour of large-scale institutional and corporate investors providing “professional” management. However, it would seem, at least from one case that has come to light recently, this is not all it would seem…
Unite Students (trading name for the Unite Group PLC) claims to be “the leading provider of student accommodation in the UK, providing homes for 50,000 students, across 28 cities.”
However, a group of postgraduate students at the London School of Economics (LSE) are currently preparing to take legal action against the university after doctors advised some students they should be rehoused to protect their health.
The students have complained that the mouldy and rat-infested living conditions at Sidney Webb House, a student accommodation block near Borough Market and provided by Unite Students, has caused their health to deteriorate.
The students are blaming their reported “intense headaches, coughing, breathing problems, dizziness, skin and eye infections” on their accommodation. One student’s GP is advising his patient to seek an “urgent room change” from the university. One student who won a Foreign Office-funded Scholarship, was admitted to hospital after developing a recurring skin infection that required surgery and left him unable to walk.
The group of students has formed the Sidney Webb House Action Group (SWHAG) and is now in the process of raising funds to sue the university via a crowdfunding website.
Students who live at Sidney Webb House say that their complaints to the LSE have not been taken seriously, though the building is owned and managed by the student accommodation provider Unite.
The company have said it is offering 450 students a payment of £100 each, as a “gesture of goodwill” in recognition of the fact that their experience of its accommodation has been “below perfect”.
However, this offer has been rejected by the students who are calling the offer “insulting” and have set a target of raising £5,000 for their legal costs.
A spokesman for LSE told the Sunday Telegraph:
“It is to be refurbished over the summer. We are, however, aware of a number of complaints about accommodation there this academic year. We are investigating each issue.”
A spokesman for Unite Students said:
“We are aware that there were a few issues during the academic year at Sidney Webb House. We are always sorry to hear that any student is experiencing poor health.
“Unite Students does not accept any suggestion that the accommodation is the cause of any medical ill health. Any class action being prepared by a student against LSE is a matter between those two parties and not for us to comment on.”
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