Talk to the EQ Taxperts
For most people and businesses, a property will be the biggest single asset held. Therefore, it is critical to ensure that it is properly protected and financed, and owned by the correct party. There are a mass of reliefs attaching to property, but an equal or greater number of pitfalls. Our Property Taxation experts can help you plot your way through these rules in order to optimise the benefits of property ownership.
Many businesses either own or lease their commercial premises, and in either case, there can be huge tax implications. Many entrepreneurs hold significant commercial property portfolios as property is seen as a safe, but high return, investment. Our Commercial Property team can guide you through the relevant issues and help you solve any problems arising.
VAT on property can be one of the most complex property tax areas. If you buy, lease, develop, rent or renovate property then you are going to come across potential VAT issues. Failure to get these issues right can result in a huge loss of tax.
Take a look at our dedicated section all about potential VAT issues and how we can minimise these risks.
Within commercial properties are a number of items that might qualify for tax relief. Imagine you could lift up a building and give it a shake. Any asset falling off has a good chance of attracting some tax relief. In general, walls, floors, roof, doors and windows do not qualify but many others items might. If some costs qualify for tax relief, this takes the form of a capital allowance, which reduces taxable profits. In our experience, this is one of the most overlooked tax reliefs.
For many years now, commercial property has been able to be held within a pension scheme, typically a Self-Invested Personal Pension or SIPP. Rents paid to a pension scheme are tax deductible for the tenant but received tax free by the pension scheme. Pension schemes attract no capital gains tax either, meaning that pension schemes can be highly tax efficient. Compliance matters and cost do need to be considered but pensions can offer excellent investment and tax returns in the right situation.
If a commercial property is owned, you may wish to consider whether it is owned by your business, or within a holding company (for asset protection). Alternatively, you may judge that this is better being owned personally, jointly with your spouse or by a family trust. Your pension scheme may also be the right owner. No matter your personal preference, you must consider the ‘what, if’ scenarios and act accordingly to protect your most valuable assets.
Our team of Property Taxation experts can help you in weighing up the risks and costs against asset and tax protection.
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