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Where Taxpayers and Advisers Meet

Who do I go to for the best advice (North Wales) - CGT & Rental income

rpwhite
Posts:1
Joined:Wed Aug 06, 2008 3:05 pm

Postby rpwhite » Tue Sep 30, 2003 8:57 am

Having owned a 2nd property (rented out to students) for the last 4 years, which I am now selling, I need recommendations on which I would be best to visit.
Do I need to see a tax advisor or an accountant, or is this one of the same.
I do realise now, that I should have been declaring the rental income so am prepared for the worst.
Any help would be most appreciated.

accountant@uktaxshop
Posts:550
Joined:Wed Aug 06, 2008 3:04 pm

Postby accountant@uktaxshop » Tue Sep 30, 2003 10:33 am

Regarding who to engage, tax advisor's tend to specialise in tax planning and some do not actually complete tax returns. Accountants tend to do more accounting record work, and some do not do actually do tax returns.

However at your point of needing some tax advice and some tax returns filling in both would probably be able to assist.

You of course have two issues - the voluntary declaration of your rental incomes for the past four years and the capital gains tax position on the sale.

Regarding the voluntary declaration of your income, this may not be as onerous as it first appears as the IR tend to be more lenient on a voluntary declarer than if they uncover your undeclared income. As you may or may not be aware, with a rental property there are often numerous expenses, the main one being mortgage interest, which can be deducted to arrive at the taxable income. Your liability may therefore not be as high as you currently anticipate. The first stage would be to calculate the annual taxes due and then submit the relevant returns to the IR. You advisor would negotiate on your behalf to minimise any penalties arising.

Regarding the capital gains on the (proposed?) sale. You advisor will be able to compute the projected gain. If you have lived in the property at any time the gains arising may well be small due to the availability of some quite powerful reliefÂ’s. In addition if gains do arise and the property is currently unsold there could be some planning opportunities, such as the timing of the sale to gain an additional 5% taper relief or even a transfer into joint names (if you are married) to double the availability of the personal CGT allowance. There is little that can be done after the sale, so advice prior to the disposal could be crucial.

Although I am not located in N Wales, I do specialise in this area of personal taxation and am able to work remotely to both advise on your disposal, compute your tax liability and submit your voluntary declaration to the IR. If this service is of interest to you, please give me a call and we can take this further.

Regards

James Smith
Chartered Accountant
www.uktaxshop.co.uk
01284 764436

TSL
Posts:60
Joined:Wed Aug 06, 2008 3:25 pm

Postby TSL » Wed Oct 01, 2003 8:39 am

It is likely that a tax advisor or an accountant will be able to assist you.

Whoever you choose it is important they have a good understanding of the tax legislation governing the treatment of rental income.

It is important that you come clean regarding previous undeclared rental income as this will help mitigate the penalties the Inland Revenue have the power to charge.

After taking into consideration the expenses that are allowable as a deduction against your rental income, it may transpire that your tax bill will not be as high as you may be anticipating!!!

I strongly recommend you seek professional advice before selling the property to ensure all tax planning opportunities have been explored.

I do specialise in the area of property taxation and would be more than willing to assist you in bringing this matter to a satisfactory conclusion. I am not located in N Wales but I do have other clients in that area. I could combine visits if this is of interest.

Jason Sharp
Tax Advisor
01159 568017
info@taxationsolutions.org.uk


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