Episode 6 - Mastering Property Tax for Commercial Property Investors
Host: Suzi Carter
Episode Title: Mastering Property Tax for Commercial Property Investors
In this episode of the Commercial Property Podcast, Suzi Carter is joined by Andrew and Nick from Property Tax People, experts in navigating the complexities of tax for property investors. Together, they delve into the critical tax considerations for UK and overseas investors in commercial property, ensuring you have the insights needed to optimise your investment strategy while staying compliant with tax laws.
Whether you're a UK-based investor, an expat, or considering overseas investments in the UK, this episode is packed with invaluable advice to help you mitigate tax risks and make informed decisions.
What You’ll Learn in This Episode:
1. Stamp Duty for Commercial Property
- How stamp duty differs for commercial vs. residential properties.
- The benefits of commercial stamp duty rates and how to calculate liabilities for freehold and leasehold transactions.
- The role of net present value in calculating stamp duty on leases.
2. VAT Considerations for Commercial Property
- Why some commercial properties are subject to VAT and how to plan for this upfront.
- The importance of checking whether a property is exempt or VATable before purchase.
- How to mitigate VAT through options like Transfer of a Going Concern (TOGC).
3. Income Tax, Corporation Tax, and Capital Gains Tax (CGT)
- Key differences in tax treatment for properties owned personally, via partnerships, or through limited companies.
- Changes to CGT rates and their implications for commercial property owners.
- Strategies for structuring ownership to minimise tax burdens.
4. Inheritance Tax (IHT) on Commercial Property
- How IHT applies to UK property investments, even for non-residents.
- Dispelling myths around inheritance tax exemptions for properties held in companies.
- Why ongoing tax planning is critical as laws and governments change.
5. Tax Considerations for Overseas Investors and Expats
- The UK tax obligations for rental income and gains on UK property, regardless of residency.
- The role of double taxation treaties in avoiding duplicate tax liabilities.
- Unique benefits and risks for expats investing in the UK commercial property market.
Key Takeaways:
- Get Expert Advice Early: Engage a property tax specialist as soon as your offer is accepted to ensure the most tax-efficient structure for your investment.
- Start with the End in Mind: Plan for potential exit strategies and ensure your structure supports flexibility without compromising on tax efficiency.
- Stay Informed: Keep up with changes in tax laws and regulations to avoid surprises.
- Leverage the Benefits of Commercial Property: From lower stamp duty rates to tax-efficient investment vehicles like SAS pensions, commercial property offers significant advantages when properly planned.
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