Property Taxation – upcoming topics

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Hello and Welcome!

I’m Simon Johnson, a Director in KPMG’s Private Client Advisory department based in the West Midlands. I thought it would be helpful to use my first blog article to introduce myself and briefly outline the topics I intend to cover over the coming months.

A little bit about myself

I have been part of KPMG for over 17 years and spend my time advising a wide variety of clients on UK personal taxation. It is an interesting, ever-changing and sometimes challenging environment but a privilege to contribute to often sensitive personal, economic and business decisions.

Property investment is a recurring but nonetheless complex area where there are exciting opportunities and a surprising number of potential pitfalls. I have extensive experience advising on the tax implications of property development and investment, land and property sales, rental businesses and appropriate holding strategies for both UK resident and non-UK resident investors.

The topics I intend to cover

In my upcoming articles I’ll cover the tax implications associated with the following areas (in no particular order):

  • An introduction to the property tax environment. The period since Spring 2012 has been one of enormous change in the taxation of residential property in the UK. We’ll explore these changes, the impact on investors and explain why a bespoke approach is required to achieve each individual’s aims and objectives;
  • Acquiring and owning an investment/development property. Should you own it personally or use a partnership or corporate structure?;
  • The new rules on loan interest deduction. The changes announced in the 2015 Summer Budget fundamentally change the economics of ‘buy to let’ investment. I’ll explain the new rules and provide insight on the approach to new and existing portfolios. I’ll also take this opportunity to highlight when tax deductions are available for differing kinds of property expenses;
  • Will your profits be subject to income or capital gains tax? For any investor or developer, the tax on profits will have a significant impact on the economic return. I’ll run through the distinction between investing and trading and show you when an apparently capital return might be considered income by HMRC;
  • Implications of purchasing UK residential property for non-UK residents. UK property is often an attractive investment for non-residents and I’ll highlight the particular challenges that such investors face;
  • Furnished Holiday Lettings (FHLs) – For tax purposes a property rental business is typically treated as investment activity. I will explain how the tax treatment of FHLs differ and the conditions for a letting business to qualify as an FHL
  • When is the tax relief available on selling your private residence? Over two articles I’ll explain the main considerations when selling your home and when you have more than one potentially qualifying property
  • Autumn Statement ‘hot off the press’ comments – The Autumn statement is currently due to be announced on 25 November 2015. Once we have had a chance to digest the contents, if there are any prospective changes of note for property owners or investors, I’ll prepare a special article covering these changes.

I hope that the articles will aid in improving understanding of the complex tax environment in which property investment and development resides in the UK. Of course these articles will be no substitute for formal comprehensive tax advice taking into account your own circumstances.

While every effort has been made to provide information current at the date of publication, tax laws around the world change constantly. Accordingly, the material should be viewed only as a general guide and should not be relied on without consulting your local KPMG tax adviser for the specific application of a country’s tax rules to your own situation.

If you need assistance with any related matters, please do email Simon at simon.johnson@kpmg.co.uk.