BREAKING: Landlords given a month longer to pay CGT bills, budget reveals

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Landlords have been given longer to pay their Capital Gains Tax (CGT) on residential property gains from 30 to 60 days, Chancellor Rishi Sunak has announced in his Autumn budget.

The measure, which takes effect immediately but was hidden in the budget statement’s lengthy accompanying detail, applies to UK residents who are selling residential property within England.

For non-UK residents disposing of property in the UK, this deadline will also increase from 30 to 60 days.

“This will ensure that taxpayers have sufficient time to report and pay CGT, as recommended by the Office of Tax Simplification,” the Chancellor’s post-budget guidance says.

“When mixed-use property is disposed of by UK residents, legislation will also clarify that the 60-day payment window will only apply to the residential element of the property gain.”

Previously, those reporting and paying tax on CGT had much longer – until the end of the tax year.

The Association of Accounting Technicians (AAT) says it has been lobbying for the past 18 months for this change.

It has highlighted member concerns that 30 days was not long enough, saying: “The process is reliant on clients setting up a CGT account online – which can take at least two weeks – within 30 days,” says its Head of Public Policy Phil Hall.

“Agents are not able to do this for their clients, which means this deadline is often missed, particularly around Christmas.

“It’s a common-sense measure that helps taxpayers and their accountants whilst maintaining increased revenue for the Exchequer.

“I am very pleased that HM Treasury and HMRC took on board the views of our members and changed their position accordingly.”

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BREAKING: Property sellers given a month longer to pay CGT bills, budget reveals

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Landlords have been given longer to pay their Capital Gains Tax (CGT) on residential property gains from 30 to 60 days, Chancellor Rishi Sunak has announced in his Autumn budget.

The measure, which takes effect immediately but was hidden in the budget statement’s lengthy accompanying detail, applies to UK residents who are selling residential property within England.

For non-UK residents disposing of property in the UK, this deadline will also increase from 30 to 60 days.

“This will ensure that taxpayers have sufficient time to report and pay CGT, as recommended by the Office of Tax Simplification,” the Chancellor’s post-budget guidance says.

“When mixed-use property is disposed of by UK residents, legislation will also clarify that the 60-day payment window will only apply to the residential element of the property gain.”

Previously, those reporting and paying tax on CGT had much longer – until the end of the tax year.

The Association of Accounting Technicians (AAT) says it has been lobbying for the past 18 months for this change.

It has highlighted member concerns that 30 days was not long enough, saying: “The process is reliant on clients setting up a CGT account online – which can take at least two weeks – within 30 days,” says its Head of Public Policy Phil Hall.

“Agents are not able to do this for their clients, which means this deadline is often missed, particularly around Christmas.

“It’s a common-sense measure that helps taxpayers and their accountants whilst maintaining increased revenue for the Exchequer.

“I am very pleased that HM Treasury and HMRC took on board the views of our members and changed their position accordingly.”

©1999 – Present | Parkmatic Publications Ltd. All rights reserved | LandlordZONE® – BREAKING: Property sellers given a month longer to pay CGT bills, budget reveals | LandlordZONE.

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Autumn Budget 2021: Support for lowest-paid tenants but also landlords hit by cladding scandal

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Chancellor Rishi Sunak has cut the amount the government claws back from workers who receive Universal Credit (UC) top-ups from 63p to 55p for every £1 they earn, but also confirmed £5 billion in funding to help bail out more property owners hit by the cladding scandal.

The new UC announcement, together with a £500 increase in work allowances, means Sunak is supporting many of the lowest-paid families with a £2 billion scheme worth £1,000 a year on average to the poorest UC claimants who have their pay topped up by the state.

“This is a two billion pound tax cut for the lowest-paid workers in our country, supports their costs of living and rewards work,” he told MPs.

Sunak said it would affect some two million families, the majority of whom will be renters, and come into effect at the beginning of December at the latest.

He gave two examples. This included that a single mother earning the national minimum wage and renting her home would be better off by £1,200 a year, while a couple with two children renting their home would be better off by £1,800 a year.

Read more about Universal Credit.

Cladding costs

Sunak’s budget speech offered slim picking for landlords overall unless they property owners within tower blocks affected by the cladding scandal.

The Chancellor confirmed the government’s £5 billion to fund more relief for those facing financial difficulties following the Grenfell tragedy – many of whom are landlords.

Mary-Anne Bowring (pictured), MD of property management firm the Ringley Group, says: “A blanket tax on developers is fairer than leaving leaseholders to shoulder the burden but it is still a blunt instrument to use to fix the cladding crisis.

“Fundamentally, accountability should fall squarely on those who overlooked the potential hazards of unsafe cladding in the first place.”

Estate agent Jeremy Leaf (pictured) adds: “The £5 billion fund is a step in the right direction but nowhere near the sums mentioned as being realistic to resolve the problem.

“A proper assessment of what’s involved is required, as well as enough tools to do the job in terms of engineers and surveyors and robust checking.

“Why should anyone be stuck in something un-mortgageable, particularly those blocks with very limited amounts of cladding? They have been tarred with the same brush as those blocks with extensive issues.”

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Budget 2021 – Landlord Reactions

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No Nasty New surprises were announced for Landlords in Chancellor Rishi Sunak’s 2021 Budget speech to Parliament today.

A key concern for landlords is inflationary pressure having to be released by the Bank of England increasing interest rates.

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Landlord duo who charge tenants 20p a shower are refused HMO licence

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A landlord couple have been refused an HMO licence renewal after admitting they charged tenants 20p to use the shower.

Glasgow councillors heard that Elinor and Jim Johnstone installed a coin meter in the four-bed HMO in Cartvale Road, Langside (pictured), and would travel from Inverness to empty it every couple of months.

They told the licensing and regulatory committee that 20p would give tenants 20 minutes in the ‘pay as you go’ shower.

A Glasgow Council inspection found seven issues at the property, including the lack of a carbon monoxide detector and a kitchen in one bedsit needing to be thoroughly cleaned, redecorated and the floor covering replaced. The property has been operating as a licenced HMO since at least 2008.

Three bedrooms also required modernising if the licence was granted in the future.

Disappointment

Councillors quizzed the pair over the regime for checking the property and they admitted the routine would involve travelling. Expressing disappointment, committee chair councillor Alex Wilson asked: “Did you just empty the coins and walk away?”

Councillor Rhiannon Spear (pictured) said she couldn’t believe her ears when she heard people paid to wash every time.

She added: “Renting to anybody in Glasgow is an absolute privilege. I’m not sure you understand the responsibility and are keeping up with the responsibility.”

Pointing to Covid as an issue, Mr Johnstone told them: “We have not been able to get down and do the inspections we would have in the past. We hold our hands up. We got it wrong this time. Things will improve – we are happy to admit that.” He added that a letting company would now be hired to manage the property.

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LATEST: Rogue tenant rumbled after applying for overlapping rent repayment orders

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A rogue tenant who duped her landlords by sub-letting their property was rumbled after she tried to claim a Rent Repayment Order on two homes simultaneously.

Vanessa Breuer had purported to be a tenant in a home at Wheat Sheaf Close in London’s Canary Wharf (pictured), owned by Christiern Dart and Katherine Richardson.

She told their letting agent that she was living with her family but then came forward to say it wasn’t actually one household and that her fiancé was her employer.

“The landlords didn’t want to be in breach of the regulations so immediately applied for an HMO licence,” Ian Norman, a partner at Lightfoots Solicitors, tells LandlordZONE.

During Covid, she had re-negotiated the rent after falling behind with payments, then as the landlords started proceedings to gain possession of the property it transpired she had been subletting it and operating an HMO.

“We believe that’s why she was so concerned about getting a licence, as she would have been found to have been operating it illegally,” says Norman. “She was profiting from the rent reduction and illegally sub-letting.”

Double application

Breuer applied for an RRO on this property for the short period it had been unlicensed but also applied for an RRO on another property, where the dates of occupancy overlapped, and had indicated that she was the tenant of both.

Challenged by a First Tier Property Tribunal, she withdrew the application. “She could have been making multiple applications – we still don’t know where she was living,” adds Norman (pictured).

Breuer was ordered to pay costs of £1,942 by the tribunal, which ruled: “It is clear to us that the applicant set about potentially unlawfully occupying the property and making an application for an RRO when it would seem she did, or should have known that such an application was, at best misconceived.”

It is not known whether the other landlord involved will pursue the case through the criminal court.

Read the judgement in full.

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£65m – Can landlords request funding on the tenant’s behalf?

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Over the weekend, the government announced a new £65m support package to help vulnerable renters who have fallen into rent arrears during the COVID-19 pandemic. It’s to be provided during the winter months and distributed directly to landlords through local councils

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Property advisory firm warns about urgent energy efficacy improvements

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National property consultancy Vail Williams, has issued a warning “call to arms” over the energy efficient energy standards of buildings in the capital.

Too much complacency

Many small to medium enterprises (SMEs) are being accused of “dragging their heels” in the Government’s quest for all UK businesses to cut their carbon emissions in half by 2030 and achieve net zero emissions by 2050.

London office landlords in particular are being warned by Vail Williams that they urgently need to get their buildings’ energy efficiency standards up to scratch or they will quickly become unlettable.

Simon Moffatt, London-based partner at the consultancy has issued his “call to arms” over efficient energy usage in the capital.

The highly experienced Moffatt advises corporate and occupier clients on landlord and tenant lease advisory, agency acquisition, business rates and valuation plus asset management strategies as part of Vail Williams’ London Occupier Advisory team.

He says: 

“The Government’s White Paper on minimum energy efficiency standards (MEES) in privately-rented commercial buildings was published in March and confirms the previously stated policy that an EPC rating of B or above will be required from 2030.

“We await the results of consultation on this but fully expect this to become law so only questions of implementation, enforcement and delivery remain to be answered, thus investors, landlords and portfolio holders have a little over eight years to react.

“More pressing in the earlier deadline for compliance on EPC ratings of C or above which is April 2025, less than four years away. Decisions will have to be taken as to whether or not premises stand even a chance of making this rating.

“Many commercial offices in London still have large gas fire central heating boilers, fluorescent tube lighting and old double glazing and will require significant works just to meet 2025 C compliance, and realistically may never reach 2030 B rating without a complete strip out and refurbishment.

“Without substantial investment in refurbishment and redevelopment, the new regulations will depress or negate the letting potential, valuation, rent and investment hold decision strategies for older stock. 

“So, stakeholders need to make decision now on how to get their letting stock in order. Like it or not, landlords and owner-occupiers need to take advice on how to reduce their buildings’ carbon footprint by improving energy efficiency to ensure the ROI is protected and enhanced.”

Sleep walking to disaster

Clearly landlords of office premises up and down the country need to be planning now their schedules for bringing their premises up to the correct EPC standards by the target dates being set by Government. This will involve tying-in with occupier tenants and in some cases when leases end and when premises become vacant.

Vail Williams’ London based Property Asset Manager Steve Hull is currently discussing with some larger office clients how they will improve their buildings’ energy efficiency to meet the government’s proposed stringent EPC minimum rating C standard for 2025. Steve Hull believes it will get significantly more difficult to organise trades to get the work done once the implications of the changes are fully realised

Hull with more than 35 years of commercial property experience says that the vast majority of SMEs may be “sleepwalking to disaster”.

The Department for Business, Energy and Industrial Strategy, based on its analysis of the latest Building Energy Efficient Survey (BEES) has estimated that commercial premises account for 31 per cent of carbon emissions nationally. 

Simon Hull says: 

“If we are to reach net zero emissions by 2050, large scale action in all sectors of the economy will be required. Unfortunately, SME businesses, the bulk of the UK business base, just aren’t tackling how they’ll reduce their carbon footprints and that is worrying.

“According to new research from the British Chamber of Commerce, only 11 per cent of SME’s currently measure their carbon footprint.

“If so, how can the UK businesses commit to cutting carbon emissions in half by 2030 or even hope to reach ‘net zero’ by 2050 when they’re not even measuring it.

“I suspect they are not putting enough amps behind this due to several reasons, such as it looks too complicated, costly, and frankly unnecessary at this precise moment to develop.

“Business may feel they have more important issues staring them in the face, such as supply and transportation delays, price inflation, gas and electricity hikes and continuing Covid-19 and Brexit implications.

“The trouble is that doing nothing is not an option. You have to start somewhere and that could be a long hard look at your energy and efficiency usage via your EPC rating.”

The current regulations

The Energy Efficiency (Private Rented Property) (England and Wales) Regulations 2015 establish a minimum level of energy efficiency for privately rented property in England and Wales.

Minimum Energy Efficiency Standards (MEES) requirements in force from 1 April 2018

From 1 April 2018, landlords of privately rented (including non-domestic) property in England or Wales must ensure that their properties reach at least an Energy Performance Certificate (EPC) rating of E before granting a new tenancy to new or existing tenants.

These requirements will apply to all private rented properties in England and Wales, even where there has been no change in tenancy arrangements from 1 April 2023 for non-domestic properties.

The National PRS Exemptions Register

If a landlord believes that an EPC F or G rated property, they let qualifies for an exemption from the minimum energy efficiency standard, that exemption must be registered on the PRS Exemptions Register – a self-certification database.

Future requirements

The Government has confirmed in its Energy White Paper that it intends to make it unlawful to continue to let commercial property with an EPC rating of below B by 2030. It has issued its proposed framework to reduce carbon emissions which it estimates will bring 85% of commercial buildings into scope.

By April 2025 landlords of all commercial rented buildings in scope of MEES must present a valid EPC. 

By 1 April 2027 all commercial rented buildings must have improved the building to an EPC rating of equal to or greater than C, or register a valid exemption.

By 1 April 2028 landlords of all commercial rented buildings in scope of MEES must present a valid EPC and have improved the building to an EPC rating of equal to or greater than B, or register a valid exemption.

This is an incremental pathway that landlords but landlords must follow and at each enforcement stage in 2027 and 2030 landlords will need to demonstrate that the building has reached the highest EPC band that a cost-effective package of measures can deliver. 

In addition, the Government intend to require landlords to present a valid EPC two years before the relevant enforcement date for each EPC target. This will involve submitting the current EPC to an online PRS compliance and exemptions database. It will trigger and set a clear time period within which landlords will be expected to undertake improvements if they have not already done so.

Possible delays to the Government’s schedule

The Minimum Energy Performance of Buildings Bill, which aimed to advance the government’s energy efficiency commitments, is in doubt following the tragic death of David Amess MP.

He was the presentation bill’s main sponsor in the Commons, launching it at the same time as Lord Foster introduced a parallel bill in the House of Lords in July.

It called for all new tenancies to have an energy efficiency performance of at least EPC band C from 2025 and all existing tenancies to reach this by 2028 “where practical, cost-effective and affordable” but currently has no second reading date. The government’s energy white paper had previously set a target of 2030.

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Slum Landlords, Nightmare Tenants returns with new episodes for sixth series

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The new series of Slum Landlords, Nightmare Tenants is to return to TV this week after Channel 5 restarted releasing new episodes of the show’s sixth series.

The latest episode is due to air tomorrow (27^th October) at 10pm and will feature Housing Enforcement Officer Sheetal Rajani (pictured) carrying out a series of surprise inspections in and around the London borough of Harrow.

This will include an investigation into a rat infestation made worse by two landlords unable to work out whose property is the source of the problem, including one who is unwilling to gain access.

Next week (3^rd November) sees the return of Landlord Action’s Paul Shamplina, who helps a landlord escape the clutches of a dodgy rent-to-rent or ‘guaranteed rent’ firm that failed to pass on rent and mismanaged his properties.

LandlordZONE looked into the firm, called RHP Lettings, last year after landlord Gulam Sumar asked for help to highlight his plight and to warn other people not to use its service.

Even after he spent several years and thousands of pounds regaining possession of his two properties, Sumar faced a repairs bill at the addresses totalling some £24,000 despite having spent £185,000 doing the properties prior to taking on RHP, cash he is unlikely to recoup.

Shamplina (pictured) says: “Guaranteed rent, or rent to rent, is becoming more and more common in the private rented sector as it offers a lower barrier to entry into the property market for would-be investors and a guaranteed rent with no hassle for landlords.

“But if the rent to rent arrangement is not carried out diligently, the landlord loses control of what is happening at their property, and this is where problems begin.”

Read a comprehensive guide to avoiding the pitfalls.

Watch the latest episodes of the show here.

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Leading figure to launch trade group for portfolio landlords

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Leading landlord figure Marcus Selmon is to launch a group for larger operators in two weeks, LandlordZONE can reveal.

Marcus, who is part of a consortium of companies operating a sizeable portfolio in the North West of England, says the new organisation is to be called the Portfolio Landlords Action Network (PLAN).

The launch is to take place at the offices of Hamilton Fraser on 10th November this year and is open to all to attend – although space limitations mean places will be allocated on a first-come, first-serve basis.

But there will be an option to sign up and watch the launch online (sign up here) which means as many people who want can see what all the excitement is about.

Ahead of this launch, LandlordZONE editor Nigel Lewis interviews Marcus to find out why he believes the sector needs a dedicated organisation representing the interests of larger, portfolio landlords.

NL: Why PLAN?

MS: Last year I was watching TV and saw an ad by Shelter asking for donations to help fund their campaign against private landlords, playing on the belief among many viewers that private landlords are the root of all evil and a group who nobody in either government or opposition circles is keen to support – which in the Tories’ case it odd given most landlords probably vote for them.

I did some research into the background and history of the private rental market to try and understand why and in doing so had a moment of revelation where I understood what the problem was.

The problem the Government has is not really with good or bad Landlords but with the whole structure of the current market where 98% of the five million properties are owned by two million Landlords who have three properties or less. They will not say that directly but that is their issue…because millions of landlords with a handful of properties are impossible to regulate.

One of our aims is to engage with Government and get them to come up with what they think the right structure is for the PRS. We believe they want more private landlords with larger portfolios. But for that to happen the Government needs to encourage the market to develop in this way.

NL: Why are big portfolio landlords different?

MS: They have a different outlook. If you own a large portfolio that you intend to hold for the long term and self -manage then your priorities are completely different from a smaller landlord or a letting agent.

Your focus is your tenants because happy tenants mean a successful business as they are your main source of income rather than any capital gain you may be making on a property (which is irrelevant if you are not selling) or the need to find new clients for your business. 

You also have the incentive to get things right because of the economies of scale operating a larger portfolio. If you are doing a thousand Right to Rent checks each year then you have to have systems for doing them properly and will invest in those systems. If you do one check a year you do not and may lose track of what’s needed and what’s not.

But I must stress that this is a generalisation, and I am sure there are many smaller Landlords who are the exception to these points.

The problem is when you have two million landlords it only needs a small percentage to do things wrong to in order to cause trouble. If you assume that two per cent of that market was made up of bad landlords that would still be 40,000 bad landlords. That is a lot of landlords and Tenants with problems. 

If those tenants complain to Shelter and similar organisations then obviously there will be an impression things are really bad.  If as Shelter say the figure is 40% (i.e. 800,000 landlords) then it’s no wonder people believe the current system does not work

NL: What will PLAN offer?

MS: It will bring together other landlords like us to try and create a group with a distinct voice. In addition, we will offer a forum for Landlords  to network with each other, share experiences and knowledge, and benefit from the information we will be providing on the latest tech and systems available for such Landlords

We are also looking at plans to offer a much wider membership for smaller Landlords who aspire to be portfolio landlrods

NL: Why does the government need to get involved?

MS: Any market relies on the rules and regulations that govern how it operates. Currently, the focus is on creating ‘negative’ rules to restrict how current landlords operate. The problem is that while these might seem reasonable for individual landlords with a few properties, they are not relevant or helpful to larger portfolio landlords.

The solution is to use a carrot and not the stick and provide incentives to landlords who are prepared to operate in a way the Government supports and encourages much larger landlords to emerge. Exactly how that would work is the detail that needs to be worked out. 

One starting point is to have a model that the Government supports and is their vision of the ideal market.

That such a vision is not there now because no one is addressing the issue of what a good market should look like. 

That is why PLAN has been formed. That is our objective going forward and we hope others will join us to make this a reality. 

Visit the PLAN website.

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