Property Tax Advisers
A property tax adviser should help you with tax mitigation and allow you to avoid “tax traps” and ensuring they only pay the tax they are required to, having claimed all available reliefs. The main taxes usually involved are Stamp Duty Land Tax, VAT, Income Tax, Corporation Tax and Capital Gains Tax.
Property development and investment usually involve few transactions but each is of relatively high value. It is essential to ensure the impact of all taxes is fully considered before proceeding.
The property accountant conducts periodic reviews, audits and inventory as necessary along with providing guidance to department managers for maintenance and repair of the company’s equipment or other assets. Job duties for property management accountants entail updating tenant records to reflect changes in tenants, rent, utilities, repair and maintenance, and common area charges, along with invoice preparation for tenants.
Stamp Duty Land Tax
The first, which relates to property, is the one you will be familiar with when you purchase residential property.
The same rules apply to buying non-residential property, although the rates of Stamp duty you will pay are slightly different. If the value of the building is up to £150,000 you won’t pay anything. Between £150,000 and £250,000 the rate is one per cent of the purchase price. From £250,000 to half a million it is 3 per cent, and over half a million it is 4 per cent.
Even if you aren’t liable to pay Stamp duty on your business premises, you have to declare all purchases of freehold property, or leasehold property where the lease was seven years or over, to Her Majesty’s Revenue and Customs (HMRC).
Many small businesses rent premises when they first set up. And the Stamp duty laws apply to leases. You don’t pay on the rent itself, but on the premium of the lease. It’s a complicated subject and you should seek professional advice from a solicitor to understand what financial impact it may have on your business when you take on premises.
As the buyer or tenant, it is you who is responsible for declaring your transaction and paying the tax due. Most businesses use a conveyancer or solicitor to do this for them
SDLT is payable on the purchase, at rates up to 5%. VAT at 20% may also be chargeable. If the property is a freehold acquired less than three years after construction, VAT will be chargeable. Otherwise, the seller may have opted to charge VAT (because he is then able to reclaim VAT charged to him). However, in either case, VAT may not apply if the purchase constitutes the supply of a property letting business to someone intending to continue that business or is sold as part of the assets of a business transferred as a going concern, and the buyer fulfils certain conditions.
A tax adviser should be able to do the following:
- Conduct research and audits to confirm enquiries regarding tenant statements
- Prepare monthly and quarterly close for buildings and properties
- Review accounts payable vouchers for maintenance and repair costs
- Complete general ledger entries and manage cash balances
- Prepare and deliver to accounts payable units invoices for security deposit refunds
- Review account records such as non-recurring tenant billings, cash receipts and credit memos to ensure accurate accounts
- Process and review accounts receivable for respective properties
- Prepare and issue property tenant statements to owners in order to update them on generated revenue and expenditures
- Analyze the general ledger to ensure its accurate and balanced
- Crosscheck input information for property and tenant lease to ensure its up-to-date
- Oversee the remittance and reconciliation of legislated taxes
- Carry out forecast to identify future cash deficiencies in order to effectively manage cash positions
- Analyze variances using specialized tools in order to reconcile payments which are against contract values
- Oversee the forwarding of rental notices to tenants prior to the beginning of a new budget operating year