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The Evolution of Property Tax Planning

30 September 2016 •

At Warrener Stewart, we work closely with clients in relation to their property portfolios and the tax consequences. Recently our tax director, Damian Talbot, invited several clients to listen to an overview regarding current tax issues facing property developers and investors.

To illustrate the effect taxes can have on property businesses, Damian outlined the key tax issues faced by property developers and investors during the growth of their property portfolios. This included reviewing the various evolutionary stages to developing a property portfolio and looking at the technical financial mechanisms that are involved in succeeding in property tax planning

The event was held near our Fulham offices at Chelsea Football Club’s home Stamford Bridge on 22nd September. Clients and staff at Warrener Stewart were afforded a unique insight not only into property tax planning, but a behind the scenes look at the Premier League club’s stadium.

“At Warrener Stewart we aim to help our clients get the best possible return on their property portfolio,” commented Damian Talbot. “There have been several changes recently that affect people with a portfolio of properties – be they a small owner-occupier developing their own residence, or those with a large property portfolio spanning multiple property sites. My presentation highlighted how, with Warrener Stewart’s tax teams’ help, developers can continue to prosper with our advice and efficient tax planning.”

Indeed, Séamus Kavanagh‎, CEO Badger Holdings Ltd, one of Warrener Stewart's clients, agreed commenting, "What a great event and venue. The points discussed were so relevant for today's property investors and were delivered in a meaningful but easy way to understand. Property tax can be a minefield and the points covered will be invaluable in helping us to guide and assist our own staff and clients in the future."

For further advice about property tax planning - whether you are a developer, investor or are just getting started, please contact Warrener Stewart on 020 7731 6163.

Warrener Stewart clocks up 150 miles on Cycle to Work Day

15 September 2016 • Warrener Stewart News

Knowing the team at Warrener Stewart are always up for a challenge, Nick Morgan, joint managing director of the Fulham based chartered accountants, encouraged several colleagues to join the National Cycle to Work Day which took place on September, 14th. 

WS-Bikes-for-web.jpg(Pictured l-r: Jon Last, Nick Morgan, Felicity Butler, Ashleigh Molton and Marcus Bullen) 

Between them the intrepid cyclists; Jon Last, Marcus Bullen, Felicity Butler, Ashleigh Molton, Charles Dessain and Nick, clocked up an impressive 150 miles cycling to and from work. For some of the younger members of the accountants in Fulham, their cycle journeys were relatively routine travelling in from Brixton and Balham compared to Jon and Nick’s epic journeys from darkest Surrey.

Nick rode 39 miles from South of Guildford over the North Downs, meeting up with colleague Jon in Esher to inject some much lacking pace and lead the final 16 miles to Fulham.

“As I left home the sun was just rising, making for an idyllic ride into work,” commented Nick. “It was “an interesting experience”, but probably not one I’ll do on a daily basis since the whole commute took me the best part of three hours and I only made it as far as Woking on the way home!”

Whilst Nick certainly had the longest journey, the prize for ingenuity and the shortest journey went to Charles Dessain. He ditched his normal bus ride and grabbed one of the Santander “Boris” bikes which were free for the day, to cycle from Hammersmith to Fulham. This still earned him the complimentary bacon roll which was part of Nick’s original offer!

A day in the life of accountancy trainee ... Victoria Dent

26 August 2016 • Warrener Stewart News

Each year Warrener Stewart recruits a graduate trainee who will continue to progress their career in accountancy through an internship. 

Recent employee, Victoria Dent shares her experience of working at the Fulham based accountants. 

What degree did you study for? 

Accounting and Finance at Oxford Brookes University 

Has this helped you in your chosen career? 

Yes, not only did it provide me with an understanding of what accountancy was but it also gave me an in-sight into what would be involved in becoming a Chartered Accountant.

What made you choose accountancy?

From a young age I have always run my own businesses and have had a keen interest in mathematics. Accountancy seemed like an obvious choice as I wanted to learn what was behind the numbers of successful businesses; something that once grasped would be invaluable in aiding the success of my own business.

What made you decide to start with Warrener Stewart?

I applied to join Warrener Stewart because they work with directly with business owners across a range of business sectors, from large estate agents to smaller retail clients. Working so closely with SME’s would afford me a unique insight into their business. Moreover, Warrener Stewart actively supported me whilst studying towards professional qualifications which was very important to me.

What is a typical day at Warrener Stewart for you?

Working within the audit team I assist audit managers in gathering evidence, performing tests and undertaking analysis of company information. At Warrener Stewart we spend a great deal of time interpreting a wide range of numbers to ensure we can offer the business owner the best possible advice that will continue the growth of their business. Alongside auditing, I also prepare financial statements and complete various ad hoc tasks in tax and other areas of accountancy.

What is the most rewarding aspect of your job?

Most definitely the professional relationships that we develop with clients; since few of our clients have a financial director they rely upon us for financial and business advice.

Equally, I enjoy the fact that I’m not solely based at our accountancy offices in Fulham, as an auditor I travel to different locations throughout London and the surrounding areas to conduct audits. Once an audit is finalised it is rewarding to receive positive feedback from the client that they are happy with the work undertaken and the way in which it was performed.

Can you outline your study/career path?  What qualifications are you studying for and when will you qualify?

I am studying towards the ICAEW ACA exams to become a chartered accountant. This involves sitting numerous exams as well as completing three years’ worth of accountancy experience. When I joined Warrener Stewart in January 2015 I already had 5 exemptions for the certificate level ACA exams because of the modules I studied at University.

Whilst working at Warrener Stewart I have passed four professional exams with the intention of sitting three more this year. If I pass the exams this summer I shall be a part-qualified accountant, with a further three to pass before I am fully qualified. I hope that by January 2018 I will have completed all my exams and be fully qualified Chartered Accountant.

What would be your advice to anyone wanting to start a career as a chartered accountant?

I would recommend paying attention to what is happening in the world of finance; employers are looking for candidates who are strong with numbers and have a commercial awareness. I would recommend looking at the financial statements for your favourite retail company or football team, read them and think about what those numbers are telling you about the entity’s performance.

Three is a magic number for Warrener Stewart directors - As they once again complete Prudential Ride London-Surrey 100

05 August 2016 • Warrener Stewart News

Hoping to beat their previous personal bests, Nick Morgan and Jon Last, from Fulham based accountants, Warrener Stewart, were amongst the 26,000 riders in the Prudential Ride London-Surrey 100 on Sunday 31st July. 

Pictured l-r Ricky Morgan, Marcus Bullen, Nick Morgan and Jon Last

Both have previously completed the closed road sportive around London and Surrey, firstly in 2014 and then again last year, 2015. This year they were joined by fellow accountants Marcus Bullen and Ricky Morgan, Nick’s son. Team Warrener Stewart all finished the course uninterrupted, despite long delays behind them due to serious accidents. 

“Whilst the route has remained largely the same, each year we have competed we have had to contend with a number of challenges, including Hurricane Bertha, punctures, injury and, sadly, again this year, avoiding serious incidents and road closures,” noted joint managing director, Nick Morgan. 

“However, we are pleased to say our times have got quicker! I was the slowest of Team Warrener Stewart, but managed to chop 45 minutes off last years’ time finishing in 5 hours and 50 mins. Jon also improved by 3 seconds (they all count !) with a faster time of 5 hours 22 mins 45 secs.  Marcus was just ahead at 5 hours 18 mins and Ricky was the fastest of us all in just 4 hours and 43 minutes – clearly good genes!”
 
This year the riders raised money for two charities, Shooting Star Chase, a leading children’s hospice charity, who will receive £1,750 and Cancer Research UK who benefit from £1,350. 

Stamp Duty Land Tax – Individuals

04 July 2016 • HMRC News, Tax Videos

 

As of 1 April 2016, those acquiring an additional property will need to be aware of higher rates of Stamp Duty Land Tax. Buyers are required to pay 3% on top of the normal bands which can be as high as 15%.

Conditions - There are four conditions for the higher rate to apply for individuals. These include the value of the interest, the number of interests owned including non-UK dwellings and whether the property is going to be a main residence, as the higher rate does not usually apply to replacing your home.

Pitfalls – There are certain pitfalls to try and avoid including:

  • Where a property is bought jointly, if one purchaser is subject to the higher rate tax, the entire transaction will be too. 
  • If the property is purchased by an individual, their spouse or civil partner are treated as a joint purchaser, and each of their interests in dwellings are combined, increasing the potential of the transaction being higher rate.

Multiple transactions - If two or more dwellings are purchased in a single or linked transaction, the buyer could be entitled to Multiple Dwellings Relief. This works out the mean consideration of each dwelling in the transaction and is subject to a minimum rate of tax of 1%. Where six or more dwellings are purchased in a single transaction, the purchaser can choose whether to apply the non-residential rates of SDLT.

Stamp Duty Land Tax - Companies

For Companies, Stamp Duty Land Tax is charged at 15% on residential properties costing more than £500,000.

Where a transaction would not trigger the 15% rate, it will still be subject to the additional 3% even if it is the only residential property that the company owns. There are no special exemptions from the higher rate for companies. This said, the higher rate does not apply to non-residential or mixed use properties, transactions with a consideration of less than £40,000 and caravans, houseboats and mobile homes.

Reliefs - There are SDLT reliefs available from the 15% rate for certain types of properties including rental properties or properties acquired for development, redevelopment or trading. There is no similar relief from the higher rate tax. Tax relief, however, can be clawed back if, for example, within 3 years the use of the property changes from the relief initially claimed or a connected person occupies the property.

Annual Tax on Enveloped Dwellings

This is a daily tax, paid annually, by Companies, at the beginning of the financial year for companies owning residential properties valued at over £500,000. The current valuation date is 1 April 2012 however this will move to 1 April 2017 for the next chargeable year. The charge is dependent on the value of the property, and a return needs to be filed and the tax paid annually by 30 April.

Reliefs - Like with Stamp Duty Land Tax, similar reliefs are available from the ATED charge, however the ATED reliefs are fully changeable. Some properties including hotels, care homes and prisons are not considered dwellings and are exempt.

Bowled over – Warrener Stewart treat staff to an evening of ten pin bowling

30 June 2016 • Warrener Stewart News

Rather than hitting the tiles after work, Warrener Stewart recently encouraged their staff to strike lucky and hit the pins!

Staff were treated to a night of ten pin bowling at a local American themed bowling alley. The company neatly divided into four teams each led by one of the four directors; Colin Edney, Gary Chapman, Nick Morgan and Jon Last.

The competition between the lanes was incredibly tense as several staff led with early strikes – including Alex Eagle who claimed to be a novice bowler; whilst others simply watched as their balls rolled into the gutter. It was a clean sweep for the winning team championed by Nick, with fellow team mates, Stuart Barbour, Francis Kershaw, Jack Moody, Ryan O’Connor and Victoria Dent.

Commenting on their win, Nick Morgan said; “It was a great evening – everybody thoroughly enjoyed themselves. Of course winning always helps!”

Pictures clockwise: l-r

  1. Half of the winning team; Stuart Barbour, Francis Kershaw and Jack Moody
  2. The other side of victory; Ryan O’Connor, Nick Morgan and Victoria Dent.
  3. Limbering up Jon Last and Charlie Dessain
  4. Bowlers in arms; Jon Last pictured with Colin Edney, Felicity Butler, Alex Eagle, Ashleigh Molton and Jack Moody.
  5. Top tips from Ryan Lane to Gary Chapman, assisted by Freddie Hollom and Sarah Libros
  6. Striking it lucky are Victoria Dent and Felicity Butler
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Theo Brehony - London Preparatory School Limited