My name is Kimberley Shapcott. I am a qualified chartered accountant with over 15 years practical experience, an entrepreneur, property investor and much more.
I have created this channel to support property investors to make tax less taxing.
As an investor myself with a background in accountancy and tax I have found the transition interesting. There are many questions and lots of information to get up to speed on from the financial perspective.
This channel will answer your questions on things like should you consider buying in a limited company, what expenses can you claim, what records do I need, selling properties and what about inheritance tax.
If you have questions then comment on the channel and I’ll answer as many as possible.
Subscribe to the channel to keep up to date with tax and the world of property investing.
Check out Shapcotts Accountants to talk to an accountant about property taxes. Check out our property projects at Believe Property
This was a very insightful video, thank you. Have a query about how I would apply these calculations to my situation. I have lived in a property owned by my parents jointly which was purchased 25 years ago, this is a shared ownership where 50% of the property is owned by them and the rest by a housing association. My dad passed away and I inherited his share about 6 months back. How would I calculate PRR given this assuming I sell? Namely following your example what purchase price should I use? Would I use the value of the property at the time I inherited his share? Or would I need to use the original purchase price from 25 years ago? Also am I right in assuming that I would scale this numbers to align with the fact that I own '25%' of the property? Thank you!
You would take the value that you inherited it at. A valuation would need to be done at this point in time to assess what the value was at his passing. You only need to account for 25% of the gain in your calculation as it is based on what you own of the property.
5 дней назад
Do you know how strict the time frame is? Say the transaction completes 3 years and 1 month later.. would that be an automatic rejection from experience? Thanks
I suspect you would need to have reason for why it wasn't within the 3 year time frame i.e. that was the intention but there was unforeseen delays which made it go over the three year limit.
Salary B4 tax if your rents are only 20k then I am assuming the salary isn't coming out of the profits therefore implying this is a work salary from PAYE?? If this is the case then you've already paid tax on it and in your example your not taking away the tax portion in your computation IE a pre tax salary and rental income = 56k putting Yiu in the higher tax bracket before you've even started ..
For rental profits you take the rental income and rental expenses to give your rental profits which are then added into the tax calculation to assess the total income. The only part not included before the tax calculation is any finance costs such as mortgage interest.
This is so useful. I’ve been looking for a video and how to guide for awhile and this was spot on! Cant believe there’s not more videos on this - thank you so much. Just need to finalise my sale have 2 months yet
i know this is not property business related but lets say i had a dine in establishment, and i was expecting to make a profit of 50k but instead i decided to buy a 40k art piece to hang in the resturant, leaving 10k profit. Would i be liable for the 50 or just 10?
From my understanding if it is creating a desirable setting or ambience in which to carry on a trade then this would be allowable for capital allowances including Annual Investment Allowance. Check with your accountant for specifics to ensure it fulfills the criteria however as a general idea it would work.
Hi Kimbderly, another great video. Cab i set up Holding company now and then set up other subs at a later stage as I go onto to do other strateries in my property biz, e.g. Rent to Rent SA etc?
Hi Kimberly - that was a very thougher and informative presentation. I am setting up a Deal sourcing and Deal pasckaging limited company and will look to your channal in future. Well done.
AIA guidance states "tools such as ladders and drills". As a limited company, can i claim back if i purchase a table saw in our first year as this is necessary for some carpentry tasks? It will be used solely for business tasks
Can you not HMRC to link to you, I've actually learnt what to do and safe myself stress for the future. Would donate but barely breaking even after so many expense rises, Thanks
Can you gift to a Trust which only comes into existence later (sorry for asking "stupid" question? The idea is "analogous" to gifting to future grand children etc.
You cannot gift to something that is not in existence at the time of the gift. Depending on the value there may be lifetime inheritance tax to be paid if the personal allowances are used up. Therefore I would suggest speaking to a tax professional to check what you are looking at doing before taking any action.
Depending on the value of the property, there maybe tax charges on the gift to the trust. Therefore it is unlikely to work. I would suggest speaking to a tax professional if you are looking at doing some planning to minimise inheritance tax implications.
The 50% from the person who did not meet the 7 year rule would be clawed back. However, the tax charge will depend how many years through the period would determine the tax on the 50% of the gift.
Hi I've just set up a limited company to build a property portfolio,I have a house on a mortgage and want to move it over to the limited company on a BTL. I have a low credit score and have some defaults and it's crushing me with interest rate implications, is there a way I can get around this, I don't know what to do I don't know who to speak to regarding bad debt? Please can you help me? Thanks Guy
Depending on the value of the property there would be costs to move it to the limited company which may not be advisable. I would suggest speaking to an Mortgage Broker to see what options you have available on the property.
Hi Kimberley - can you use PPR if you purchase a new main residence before selling your original main residence and sell your existing main residence within 9 months of purchasing your new main residence?
I bought BTL property for190000 , interest only. I have paid off 40000£ . Can I include interest on 40000 £ with interest on 150000£ as mortgage interest or not?
These are reported on the corporation tax return which needs to be filed each year to HMRC. They will be included each year so no specific reminder needed for logging them with HMRC.
You imply that the property was sold in 23/24, but when was the property purchased? If the property was purchased in 2018/19, surely you can set off the total gain against the total of each of those 5 years CGT allowance, otherwise that would be grossly unfair, given 5 years of inflation might mean that there is no gain at all in real terms
You only have one personal allowance in the year that a property is sold and you do not collect annual allowances each year over the period of ownership. Based on your comments it is an unfair system as those who own for longer periods of time will have larger gains to pay tax on and inflation is ignored.
Bless you Kimberley! I've been tearing my hair out for days trying to get my head around calculating PPR and you explained it clearly in 5 minutes.Thank you so much.
Firstly thanks for taking the time to upload your videos. I personally found the issues you discuss informative. You gave an example of someone who owns a pub, and splits various aspects of the business into separate companies. Artificial separation which can be viewed a something dodgy. My question is that I have heard of people doing this type of thing for the purpose of asset protection. You have a hospitality business, but you separate the business so that if you are sued you have protection. Are you allowed to separate your companies for asset protection. If you do this are your assets protected?
There is a balancing act between doing something for asset protection and for avoiding or minimising taxes. The associated company point is that by having multiple companies, you will have potentially more tax to pay due to how it works.
What does it mean when you say that CAs can only be claimed once? If the former owner of a FHL has claimed one-quarter of the CAs available, does that mean that we cannot claim the balance because they have claimed CAs already? Or can we claim those unused CAs? I know that there is a tax case where some CAs were possible to be claimed in an HMO.
If the owner has already claimed part of the allowances, as part of the legal process you need to check what has been claimed to see what is still available to claim and you cannot claim if they have already claimed them all using the annual investment allowance.
Thanks Kim, very useful. If you can give some feedback to our situation I’d be very grateful. My wife and i are going to travel full time in November. We have just rented our house out on a repayment mortgage that expires next April, should we go to buy to let on next term? We were not aware of the whole tax situation, thinking now maybe we should have sold up and invested a chunk of equity into stocks? If it’s going to cost us more than it was before. I guess after November when we have no incomes travelling the tax should be zero. But then there is CGT when we sell. Between now and Nov I’m a 20% tax payer and my wife is 40%. So the first 5 months will cost us. Any advice 😊
You will need to speak to a mortgage broker to see what options you have with the mortgage. You will need to complete a tax return for the period that you rent out the property which will be for 2024/25 tax period. Depending what other income you have you may limit the tax payable if it falls within the tax free allowance. You will have some Capital Gains tax on disposal, however if is for a short period this should be insignificant for the gain and you capital gains personal allowance of £3,000 may cover it,
Hello great video What to do in my sytuation I thinking of sell my own house in UK I bought it 10 years ago with my wife . First 4 years we were living there and now we are renting out ( last 6 years ) because now we live abroad , so we are non residence . How to proof improvements ? house was empty no gas instalation , no carpets , olw windows when we bought it have all old photos. What to do after sale ? will we have to pay cgt tax? House has no mortgage. Any 5 year rule aviable because we are not planning to come back to uk ?
This is quite a complex scenario due to the overseas nature and question of residency. I would suggest speaking to a tax professional to get specific advice to ensure you minimise any tax that may be payable on the disposal.
Hello great video. Just to confirm I do Airbnb on an interest only mortgage. So I definitely can claim the full amount for each month not just 20 percent? Much appreciated
At present you can claim the full amount of your mortgage interest as an allowable expense. This is changing from 6 April 2025 however we have limited information on these changes at present.
Hi, Great video thanks. Quick question, if you use the 325k allowance within the 7 year rule does this just mean you don’t have that allowance once the person gifting has passed away? Or is there a fresh 325k allowance? Thanks
Thank you for your video, may I clarify about the adjusted total income should be the amount exceeding personal allowance or the total income, for the example of 2023/2024, should adjusted total income be 54000-12750 or 54000? Thank you!
Nice and clear thank you. Two questions follow on from this- How do we record the gift to our children? Would a document confirming the parties, date amount and that it is a gift not a loan cover it? If two parents gift a PET to their children but then say one parent dies after 2 years and second after 7 years is it still exempt? Does the full exemption pass to the surviving parent?
A simple note in your records is sufficient to record any gifts to children. There would be potential inheritance tax if one of the parents did not survive 7 years.
Hi Dear - I have a question please. I want to transfer my existing home (I’m living in it since bought) to my existing Pvt Ltd company (that’s my business too) and let it out. I want to buy a new house and move my family. My company has the funds in business account- since my personal earnings source is my business, I need same funds to purchase new house too. How in this situation I can use company funds to buy new house and at the same time company to buy my existing house please?
It sounds like your company will need to buy your house on a mortgage to then pay yourself which will provide the funds to buy your new house. It looks like it will be possible and will simply be a matter of timing of the different transactions so they all line up.
Great video. It is possible to provide similar calculations for a beginners like me to step-in with an assumption of 600 PCM from a property please? I am working too, do I need to add the limited company income + divident to my regular primary salary and file self assessment too? If so, I may move to bit higher tax band right?
@@kimberleyshapcottpropertytax that will help like new bees like me to jump-in. It's been 2 years after my training without any transactions. Lol. Probably some thoughts on minimum profit considerations in this mountain high interest rates.
