Property tax for individuals has experienced a ream of changes since 6th April 2016 as the government attempts to free up residential properties for first time buyers. As a developer and investor, the changes to how property is taxed affects income, capital gains and stamp duty land tax making the exercise a more costly affair, and in so doing acting as a deterrent for landlords. Specific changes include the 3% surcharge on stamp duty land tax for investors as well as the phased cap of income tax relief on mortgage interest.
It is safe to say that property investment at present is a risky affair, as although the tax changes are simple in nature, they are generic and therefore create much uncertainty for clients when trying to relate these rules to their bespoke and often diverse property portfolio. Now more than ever it is imperative that residential property investors seek professional advice from an accountant to plan effectively for the tax changes that have come into play this year. In saying this many local professional firms, whether it be accountants or solicitors are washing their hands of advising on property management in Birmingham due to the uncertainty over the recent changes.
It is safe to say that property investment at present is a risky affair, as although the tax changes are simple in nature, they are generic and therefore create much uncertainty for clients when trying to relate these rules to their bespoke and often diverse property portfolio. Now more than ever it is imperative that residential property investors seek professional advice from an accountant to plan effectively for the tax changes that have come into play this year. In saying this many local professional firms, whether it be accountants or solicitors are washing their hands of advising on property management in Birmingham due to the uncertainty over the recent changes.
At James, Stanley & Co we take a different view, and recognise the importance of delivering effective property tax planning to provide reassurance and options for clients, many of whom who have investments in residential properties in Birmingham. To that end we have invested in the latest property tax software such as our “Property Impact Review”. This software in turn provides two key benefits; firstly it provides clients with a real-time tax liability based on the new property tax rulings, derived from their current property portfolio. Secondly it generates tax planning options for clients by restructuring their investments in order to legally minimise future tax payable. Examples include sharing property with your spouse as well as considering transferring your property portfolio into a limited company. In addition we have a dedicated property expert whose sole responsibility is to advise on all aspects regarding property; whether it is as simple as confirming tax rates to as robust as advising clients on the best type of investments to purchase at property auctions in Birmingham.
When looking at the impact our solutions help save clients tax, we strongly recommend that any individual with a residential portfolio of six properties or more contact us as soon as possible. For these individuals it is often possible to negate all adverse tax changes using our tax planning solutions, saving literally tens of thousands of pounds, but as always is imperative to plan now before it is too late.
