January 25

New Year, New Plans

It is not quite Spring and the threat of snow isn’t quite past. However, now is the perfect time to review your finances and in particular your property and wills.

Wills

With a majority of working adults owning their own home, your will is the most important tax planning tool. It protects your beneficiaries and maximises the estate you can pass on.

So a professionally drafted will can assure your family, prepare for the future, reduce the tax burden and simplify your affairs.

Currently each person has an allowance of £325,000. So only your net estate (after mortgages, debts and liabilities) over £325,000 will attract inheritance tax at 40%. In Chiswick flats can sell for over £450,000.

However, from April 2017 there will be an additional allowance where your residence is inherited by close relatives. It will reduce the value of your estate by £100,000 in 2017. The allowance will increase each year by £25,000 until 2020 when it is worth £175,000. Like the main Inheritance Tax allowance of £325,00, this new allowance can be transferred between spouses and civil partners.

There will be conditions to the allowance that will need to be considered carefully when drafting your will. This become more essential if you have family trusts in place, more than one property or are considering downsizing.

Property

By far our largest investment, our home, is the cornerstone of our financial security. Increasingly we are using our home for a myriad of purposes and our service has developed to meet those needs.

In particular, professional legal planning and guidance is highly recommended if you are:

  • - extending your property
  • - negotiating a lease extension
  • - downsizing
  • - remortgaging
  • - converting to a Buy-to-Let
  • - transferring to relatives

We have extensive local knowledge of these popular transactions. We often offer fixed fees for your convenience and simplicity.

We can make the implementation of your choice a simple and clear process.

Contact us to find out more.

June 13

Are you Summer Sale Ready?

Summer is the busiest time for property transactions. If you’re thinking of moving, are you prepared?

Use our legal checklists below to ensure you are summer sale ready.

Sales

1. Check the outstanding balance on any mortgages or loans related to your property and contents that will be included in the sale such as a new boiler, windows and shutters.

2. Gather together all your original paperwork especially for guarantees, warranties, planning permissions and building regulations.

3. Certificates of inspection for gas and electrical systems.

4. Research local estate agents and be prepared to negotiate their commission.

5. If you have a flat, contact your freeholder or managing agent to check your service charge account & ground rent are up to date.

6. Consider your timescales for moving. If it is less than 6-8 weeks special instructions may be needed.

7. Contact us for a fixed fee quote for our legal services, which will include a full breakdown of all related costs payable to third parties.

Purchases

1. Instruct an independent financial advisor (not tied to one lender).

2. Obtain a mortgage offer or at least in principle for a specific sum.

3. Check the date your mortgage offer expires. Usually 3- 6 months. After that your advisor may be able to extend it but only if the mortgage deal is still available.

4. Contact us to obtain a fixed fee quote for legal services, which will include the property related searches and stamp duty land tax. The searches are specific to a borough and/or postcode and so the price may differ from borough to borough.

5. Stamp duty is calculated on the purchase price and also if it is a buy to let transaction.

6. Check if your mortgage lender has restrictions on who can be your solicitor. For example Austins is on the panel for Santander transactions.

7. Consider your timescales for moving. If it is less than 6-8 weeks special instructions may be needed.

8. If you are buying a flat have you factored in the annual service charges and ground rent?

Being summer ready is about prior planning and preparation. As a national Conveyancing Quality Scheme accredited practice, we can assure you with a fair price for an efficient and professional service.

Contact us for further details.

February 15

SDLT on the acquisition of additional properties

It is important to note that from 1 April 2016 higher rates of stamp duty land tax (SDLT) will be applied to additional residential property purchases above £40,000. Announced as part of the government’s 2015 Autumn Spending Review, this will raise SDLT rates to 3% higher than they currently stand.

This will apply to:

  • Buy-to-let properties
  • Second homes.

This will not apply to:

  • Purchases of caravans, mobile homes or houseboats
  • Corporates or funds making significant investments in residential property given the role of this investment in supporting the government’s housing agenda.

The government is due to consult whether exemption is appropriate in the case of corporates and funds owning more than 15 properties.

Changes to the filing and payment process
The government is due to consult on changes to the filing and payment process. This includes a proposed reduction in the filing and payment window from 30 to 14 days. Any changes are due to take effect from 2017-18.

Changes relating to ATED and 15% higher rate SDLT
Reliefs available from Annual Tax on Enveloped Dwellings (ATED) and the 15% higher rate of SDLT:

  • From 1 April 2016 these reliefs will be extended to equity release schemes (home reversion plans), property development activities and properties occupied by employees.

Changes to SDLT and authorised property funds
A seeding relief will be introduced for:

    • Property Authorised Investment Funds (PAIFs)
    • Co-ownership Authorised Contractual Schemes (CoACSs)
    • Changes made to the SDLT treatment of CoACSs investing in property

This blog post is only a brief summary of the SDLT changes. For more information on how this could affect you, please get in touch with us. 

January 18

The Right to Rent Scheme

The Right to Rent Scheme comes into force 1st February 2016.

As a part of the Immigration Act 2014 every private residential landlord must check their prospective tenants’ immigration status. UK, EEA and Swiss nationals have an unlimited right to rent and so do not need to produce proof of their right to rent.

It applies where the tenancy is the only or main home of the adult occupiers.

Tenants, including occupiers, not listed on the tenancy agreement, need to have the relevant original paperwork before they approach a prospective landlord. (See www.gov.uk for a definitive list of documents required.) Adult occupiers are only required to produce documents in line with the government’s guidelines. Otherwise, the landlord could be at risk of being accused of discrimination.

The scheme’s aim is to discourage individuals whose right to reside in the UK has expired, so they cannot establish ‘a settled life’ in the UK. This scheme relates to any nationals who require permission to enter or reside in the UK.

Similar codes of practice are already in place for employers.

By checking the relevant documents, landlords or their agents, have a defence (statutory excuse), if the tenant’s right to reside is questioned by the courts.

The responsibility is an onerous one and the failure to comply could result in penalties against the landlord or their agents. The exact penalty will depend on the circumstances of each case.

Our advice is to be on the safe side and include it into your pre-tenancy check now.

  • Be clear who is responsible for checking the documentation, you or your agent.
  • Ask all prospective tenants to provide proof of their nationality. Only individuals from outside the UK, EEA or Switzerland need to provide proof of their right to rent.
  • It is essential landlords or their agents check ALL the adult occupiers not just the ones on the tenancy agreement.
  • Keep a record of when the checks were carried out, a copy of the original documents presented and details of when the permission expires.
  • Recheck the documents on or near the expiry date to ensure the right subsists.
  • Advise the Home Office immediately, if any relevant tenant’s right expires
  • The scheme relates to all residential accommodation even shared accommodation and can include caravans

If a local authority, housing association or other social housing provider; places tenants with you, they carry the responsibility of checking the requisite consents.

Hostels and refuges are excluded from this scheme, where they are funded by the local authority, government or charities.

For more detailed information on acceptable verification documents, procedure, penalties and exclusions please visit the website www.gov.uk for the definitive information.

This blog post is only a brief summary of the new scheme and is provided for indicative purposes only.