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Whether you are buying, selling, renting out, developing, or inherited a property then unfortunately, tax is involved somewhere. Get it wrong and you could be faced with penalties and interest - get it seriously wrong and you could end up in prison. Depending on your circumstances there are ways to carry out some property tax planning, whether prior to or after buying, whether the property is a buy-to-let or commercial property or even your main residence.
Most accountants have some property tax knowledge but a property tax adviser is the one with the specialist knowledge. They deal with property tax every day and will know the 'ins and out' of property tax. They will know how to organise your tax affairs so that you pay the least amount of tax. They can also provide advice on how best to approach the taxman if you have not previously disclosed your rental income.
A property tax adviser will look at where your property sits in your overall financial affairs undertaking a property portfolio review including looking towards the future and any inheritance tax issues. They are used to dealing with property specific transactions to help you get the most out of your investments.
Examples of Planning Advice for a Property Tax Advisor
This can include:
· the pros and cons of owning property personally or via a company.
· consideration of the timing of the property purchase or sale to make use of any annual exemptions and tax reliefs that might be available
· how to transfer property between spouses to ensure maximum reduction in tax liability
· reclaiming VAT on costs incurred on new- build, conversion or development projects
· advice on forming a Partnership or Limited Liability Partnership (LLP)
· any tax problems that might arise should you decide to live abroad
· any inheritance tax issues
What to Consider When Looking for an Effective Property Tax Adviser
You should consider the following:
1. how much experience in property tax do they have? Ask how long they have been giving advice and what are their qualifications.
2. If you are a property developer ask for confirmation as to how many existing clients do they have on their books who are property developers.
3. Don't be afraid to ask for references.
4. Is the Property tax adviser a property investor themselves - if so this means that they can talk your language and appreciate any problems that may occur.
5. Are they transparent with their fees - ensure that you obtain a quote.
6. How did you feel when you first made contact - was the tax adviser someone who you could work with?
And finally - word on the street is that the Chancellor is considering increasing capital gains tax. That will potentially have a large impact on anyone who owns property that is not completely covered by the main residence relief. A good property tax adviser will already be aware of such threats and be able to advise accordingly.
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