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Main Residence

Main Residence Relief If an individual sells their only or main private residence, any gain is exempt from tax. This includes the garden up to 0.5 hectares, or a larger area if required for reasonable enjoyment of the residence. If the property has not been an...

Property Losses

If a UK property business run by an individual makes a loss, that loss cannot be offset against the individual’s other income and gains. Instead, losses can be carried forward and set against future profits of the same business, indefinitely for as long as the same...

Replacement of Domestic Items Relief

Relief is given for the replacement of domestic items to all landlords of residential property, regardless of the extent to which the property is furnished - the previous wear and tear allowance was only available for furnished properties. The relief is not available...

Letting and VAT

Residential letting is exempt from VAT. Landlords are unable to register for VAT if they only make exempt supplies. However, if the landlord separately has a VAT registered business, they may be able to reclaim VAT on expenses such as letting agent fees and...

Incorporation for Landlords

Some potential advantages of incorporating a property business are: Companies are an effective tax shelter for those who wish to use their rental income to purchase new properties due to the low rates of corporation tax in comparison to income tax. Shares are usually...

Furnished Holiday Lets

A standard furnished lettings business is an investment rather than a trading activity, even where a high number of properties are owned and serviced by the landlord. This means that various capital and income reliefs are not available to most landlords, mainly...

Relief for Finance Costs

From April 2017 relief for finance costs, including mortgage interest, is being phased out, with a view to limiting relief to the basic rate on the entire finance costs by the 2020/21 tax year. The withdrawal is being introduced as follows: in 2017/18 the deduction is...

Rental – Business or Trade?

Mr and Mrs Griffiths rented out 11 properties, mainly furnished to students and other short term occupiers. They provided various amenities and services, and spent much of their spare time collecting rents, finding new tenants, inspecting properties and ironing out...

Sale of garden

Mr Lynes sold his home but kept part of the garden and applied for planning permission to develop it. Four years later, he sold the garden and claimed main residence relief on the sale. The legislation granting main residence relief is written...

Capital or revenue

Bullcraft Main Collieries Ltd and Samuel Jones & Co were two separate businesses. Both had factories with chimneys which were in such bad condition that each had to be demolished and replaced with a new one. In both cases, a new chimney was built while the old chimney...