9. Bulk Purchase
Rules Price
averaged Residential Property
Min 1% rate Broadly suitable for use
Non-residential
as a dwelling
includes mixed use and
> 6 dwellings
http://www.hmrc.gov.uk/sdlt/intro/rates-thresholds.htm#2
10. Non Natural Persons, SDLT and
residential property > £2 million
‘Non natural persons’:
15% rate for res
property > £2 million
11. Business Travel
• Approved Mileage Rate up to 45p/mile
from April 2011 (was 40p)
• First 10,000 miles
• No change above 10,000, stays at 25p
• Employer pays less than 45p?
– Claim Mileage Allowance Relief on shortfall
CLAIM THE
DIFFERENCE
14. Effects
• Severe reduction of Annual Investment
Allowance (down to £25,000 from
£100,000) wef 2012
• WDA also down by 2% wef 2012
• But Good News:
• Extension of Short Life Asset treatment
from 4 to 8 years
15. Short Life Asset
• Previously restricted to 4 yrs, now 8 yrs
• Treatment
– Treated separately from ‘pool’
– Ordinary claims at 18% pa during ownership
– Sell for LESS than balance claim difference
– Sell for MORE than balance pay balancing
charge
• After 4 yrs/8 yrs, if not sold then
transferred to general pool of P&M
16. • £100,000 machine
• Balance after 4 yrs @ 18% pa = £45,212
• Balance after 8 yrs @ 18% pa = £20,441
• So sell Yr 4 for £30,000, claim £15,212
balancing allowance
• New approach extends availability to 8 yrs
See: http://bit.ly/lQ6K9n for more
17. Furnished Holiday Lettings
• What was good for tax:
– Claim Capital Allowances
– Claim Loss Relief
– Rollover Relief from CGT
– Holdover Relief from CGT
– Entrepreneurs’ Relief from CGT
– Pension relief
– Business Asset for IHT
• Looked as if we were going to lose this ….
18. FHLs: the changes
Was Will be
• UK • UK and EEA
• Commercial, view to profit • Same
• Longer lettings no more • ?
than 155 days pa
• No single let more than
31 days
• Available for holiday • Available for 210 days
letting 140 days from April 2012
• Actually let 70 days • 105 days from 4.12
• Losses restricted to FHLs
21. New VAT guidance on land and
property
http://customs.hmrc.gov.uk/channelsPortalWebApp/channelsPortalWebA
pp.portal?
_nfpb=true&_pageLabel=pageVAT_ShowContent&id=HMCE_PROD1_02
3492&propertyType=document
22. VAT on Listed Building
Alterations
• Proposed to be Standard Rate VAT wef 1
October 2012
24. Farmhouses …
• Rachel Dixon and her Westmorland
Damsons
• The Rosser’s retirement home
• Mr Higginson’s Irish shooting lodge
• Rosemary Antrobus Cookhill Priority (I &
II)
• Sir Reginald McKenna, Rosteague House
25. • Mr Farmer and his diversified farm
• Ragley Hall’s business
• Mrs McKenna’s Conacre Field
• Brander (or Balfour), a Scottish business
• Mr Atkinson’s partners in Lancashire
• Mr Golding’s very small smallholding
http://bit.ly/n0Gdjq
• Hanson v HMRC [2012] UKFTT 95 (TC)
• Pawson v HMRC [2012] UKFTT 51 (TC)
27. • Market Valuation: s160, Red Book
• Define Agricultural Property: s115
– Land to which buildings and woods are
ancillary
– Tenure considerations
• Define farmhouses, cottages, farm
buildings (s115)
28. Advise on ‘character appropriate’
(s115)
• Size, content and layout considering
AREA of land
• Size, content and layout considering
FARMING ACTIVITIES
• Elephant Test?!
• House with land, or a farm?
• History
• NB Retirement Homes!
29. • Opinion/evidence on satisfaction of
occupation requirements: 2 years/7
years before death (s117)
• Full Valuation Report: Valuation and
Report for Inheritance Tax Purposes
(but NOT a probate valuation)
33. Value this farm for IHT
• 5 bedroom farmhouse
• 3 cottages, 2 occupied by farmworkers, 1 let
on AST
• 200 ha: 50 ha Grade 2, 140 ha Grade 3, 4 ha
yards and waste, 6 ha Grade 4
• 200 dairy cows, followers, 80 ha arable
• Ice cream business: 500 000 l pa @ £1/l
• 5 000 sq m of ‘modern’ farm buildings
• 500 sq m office conversion, fully let
• 500 sq m with pp for holiday conversion
The Purpose of a valuation is fundamentally important for the following reasons: To establish professional framework – eg Red Book or not Red Book requirement – state purpose of valuation Special provisions if client will not tell you purpose Important implications for instructions Basis and definition of value Eg Market Value has slight differences for tax purposes from general Red Book definition of Market Value. Extent and nature of inspection Reporting requirements Liability and conflicts of interest Basis on which Instructions will be confirmed and other preliminary requirements