Tax Advice for Accountants
As you are aware accounting and tax are two distinct disciplines. Despite the best efforts of the ONS we still have an extremely complex system of taxes underpinned by a mass of ever growing legislation. No individual or firm could be an authority on all of it.
Here at STax we work in conjunction with accountants to provide tax advice in one of the more niche areas, real estate. In the same way that a medical GP might refer a patient to a heart specialist the role of the accountant is to identify when a need for specialist advice has arisen. Especially now post Mehjoo, every firm should have a panel of different discipline specialists they can turn to when client’s requirements go beyond the firm’s core competencies. Some (certainly Mr Mehjoo) would even say accountants are under a duty of care to ensure this is the case. We would be delighted to work with you and be your real estate tax experts.
The firms we have worked with have found our advice particularly useful in the following areas.
(Mouse over the points below for more information)
Capital Allowances - Fixtures
Many of your clients may be sitting on a reservoir of untapped tax relief from the fixtures in their building(s). Whilst you will be picking up on expenditure that can be claimed when you see the invoices, many items may be mislabelled or hidden in general/ambiguous descriptions e.g. building work £50,000. We are often instructed to review the expenditure of major renovation works to make sure that all eligible expenditure is claimed.
In many situations taxpayers can claim a proportion of the purchase consideration of a building. This is deemed as having been for the items of plant that were in place at the time, even if the building was purchased many years ago. This apportionment involves undertaking a full survey of the building and needs to be processed in accordance with the guidelines laid down by HMRC and the VOA. This can take a couple of months to complete but can deliver as much as 35% of the cost of the property in allowances (this percentage will vary a lot between different buildings and industries).
We only charge on a performance basis for this work to make sure that your clients can only ever benefit from our involvement. All our advice is guaranteed on success. In the unlikely event that HMRC or the VOA enquire into our findings all questions and negotiations will be handled by us at no extra cost to the client.
Transference of fixtures
There has been a significant shift in how allowances on fixtures should be handled during the conveyance of a property. If this legislation is not addressed correctly it can have a huge financial impact on both parties.
We can provide advice on not only complying with the new legislation but also strategic assistance in the negotiation process, to help deliver the best possible outcome for your clients.
In 2013/14 we ran a series of CPD seminars for the joint branches of the CIOT & ATT covering these changes. The notes from these seminars are on the link below if you wish to learn more.
When a property is either bought or sold you are triggering a taxable event which will have tax implications, be it SDLT on purchase or CGT on disposal. Whilst the payment of tax is one of life’s great certainties there is no need to volunteer more than required by law.
We can review transactions, both past and pending to see if the sale/purchase is being handled in the most efficient manner and that all due reliefs have been claimed. Even if a building was bought some time ago there may still be things that can be done to deliver a tax benefit.
The Annual Taxation of Enveloped Dwellings ‘ATED’ is a new tax on properties held by non-natural persons. This is a completely new tax with its own reporting, reliefs and compliance requirements. Needless to say, making sure your clients are aware of and comply with the legislation in this area is crucial.
As well as providing advice direct to your clients we can also supply you with a number of supporting resources, including:
- Draft emails to bring these tax related matters to you clients’ attention
- Articles for newsletters
- Model documents e.g. s198 elections
- Technical briefs for use within your practice
- Training for you and your staff so they can identify areas of risk & opportunity
If you have any clients who are involved in real estate or who own property, contact us today for a chat to find out how we can assist you and your clients.