In part 2 of our World Cup property and landlord tax blog – My Wife Wants A Brazilian – we explore the final countries who make up the final 4 quarter final places and how they relate to the property tax system.
Hmmm, Argentina. It’s fair to say there is a bit of history between the England team and that lot! A certain Maradona springs to mind. In one single game, he showed everyone why he was quite possibly the greatest player of all time, and also, why he was the biggest cheat of all time. And then we had the timid Diego Simeone, writhing in excruciating pain after being tapped on the leg by hard man David Beckham in 1998…..inevitably the latter being sent off, and the rest of the team being sent home soon after. After penalties of course. But in recent times, the team have started mixing politics with football, recently holding up a banner before a match saying “Las Malvinas Son Argentinas.” I’m certainly not going to get involved in the politics here, but it raises the question of residence and this is a key area to consider in the near future.
The Finance Bill 2015 is expected to abolish the power to nominate your main residence and therefore restrict the available principal private residence (PPR) relief, from 6 April 2015. Previously, landlords and property investors were able to nominate their main residence, which allowed them to mitigate CGT on the property which would likely attract the highest capital gain. Assuming this proposal comes into force, now may well be an excellent time to review your property portfolio, and consider whether action is required before it is too late. This is a specialist area, and do feel free to contact us for further advice and guidance.
Next up is France. With their rich history of talented footballers, ranging from Fontaine, to Platini, to a certain Mr Ooh Aah Cantona. And then we have Zidane. Arguably the greatest player of his generation, and a real delight to watch whilst he played. But, in a moment of madness, it all came crashing down, retiring after the shame of being sent off for head-butting Materazzi in the 2006 World Cup final.
All good things must come to an end, and this is exactly the case for Landlords Energy Savings Allowance (LESA). This is a valuable claim for landlords against rental income, and allows up to £1,500 to be offset by way of an allowance. This £1,500 is per property, and can be claimed when purchasing and installing energy saving products such as draught proofing, hot water systems and floor insulation to name but a few.
But, and this is a big but, the expenditure must be incurred before 1st April 2015, as the LESA is due to end then. So like Mr Zidane, a wonderful product whilst it lasts, but these things must come to an end.
Next up is Germany. Mainstays historically in the latter stages of the World Cup, with almost superhuman powers when in action on the field, not least when they need to settle a match on penalties, as England know only too well.
And so it is the subject of penalties we explore here with regards your tax affairs. These must not be ignored, and it is of paramount importance you ensure your tax return is correct and timely.
If you are late filing by just one day, the penalty imposed will be £100. Once a tax return becomes 3 months late, penalties of £10 per day are charged in addition up to a maximum of £900. Then, if the return is 6 months late, there is a further £300 charged, or 5% of the tax charge is imposed, whichever is higher. And when 12 months passes, things get serious! A further £300 or 5% penalty is imposed, with the threat of penalties up to 100% and more.
In addition to the above, which relates to late filing, there are also charges for late payment of tax owed, if applicable. A 5% charge is imposed at the 30 day, 6 month and 12 month mark.
Finally, penalties can also be imposed if your tax return is incorrect.
So, as with Germany, be aware of their penalties. Be afraid, be very afraid!
Ok, arguably, the Belgium national team have not had much of a past to speak of. But they are the new boys in town, causing chaos and mayhem, and appear to be getting stronger every year.
This is very much like the new Let Property Campaign team. Their sole purpose is to aggressively pursue those landlords it is aware of, who have not been declaring their rental income. 40,000 letters were sent a couple of months ago, and another 40,000 have recently been sent, as per our previous blog. We cannot stress enough the importance of coming forward to HMRC before they come to you. If HMRC come to you, penalties could be imposed of up to 100% of the tax owed along with a potential criminal investigation.
Our previous blog shows an example of the letters which are being sent out.
The truth is out there, and HMRC know! If you are not compliant, please make sure you are! RITA would be delighted to assist and please do not hesitate to let us know if you require further assistance.
Here at RITA, our day-to-day work is landlord taxation. We offer extremely competitive fees, however, the value in our service is that we are industry specific to landlord taxation, and therefore our clients find that the tax savings are of more interest that the fee we charge.
Further reading and an HMRC Let Property Campaign case study is available to read over at our partners at the Residential Landlords Association. Please click here to be redirected.
And so, this concludes our World Cup blog. We hope you have enjoyed it.
The quarter finals begin tonight, with England nowhere in sight. We can instead look forward to two years’ worth of qualifiers against one good team, and lots of games against top footballing nations such as San Marino and Gibraltar!
Stay tuned for further blogs!