HMO Tax - Process

Hi Arthur
I wanted to thank you for the awesome service you have provided to allow me to claim an unbelievable £14k back from the tax man.
It was difficult to believe this was possible until the money was in my account.
For any one who owns an HMO, your service is worth every penny.
Thanks again and sincere regards.
Zaid Rashid
Mutual Property Solutions

"I was very sceptical of the real tax advantages of working with Arthur and his team as I run a very tight financial ship, my account is second to none and the amounts he was quoting seemed too good to be true.
After seeing the tax savings Arthur had identified for another house share landlord I work closely with I decided to give it a go.
To say the savings were astonishing would be an understatement!
Im extremely pleased with the work he has done, the savings I have achieved and will be working with him on all future house shares."
Steve Julien
HometimeUK.net

"Am absolutely amazed at the amount of Capital Allowances Arthur Kemp has allowed me to claim. Just from one of my HMO properties in Cambridge, Arthur has helped me offset £21,581 from my previous years Taxes. This represents 50% of the total Capital Allowance that I have submitted to my accountant. Arthur Kemp’s knowledge and expertise surrounding the Capital Allowances from HMO’s is quite remarkable. I would strongly urge any HMO Landlord to arrange for a free consultation with Arthur Kemp as soon as they can. Please fell free to contact me to learn more from my experience."
Justin J Goddard
Fast Home Solutions
Cambridge

Case study of Capital Allowances for Adam & Frances Long.
Adam and Frances Long are property investors, with a substantial portfolio. They own single rental units, HMO properties as well as a block of flats in London.

Adam and Frances have been investing in property for over 10 years and have a varied portfolio spread across the country. They specialise in providing housing solutions to those who cannot obtain finance in the traditional manner as well as assisting homeowners who are struggling to sell due to negative equity or debt problems. By using advance financing methods they are able to free the homeowner from his burdens within 7 days or less.

Adam and Frances were intrigued by the fact that Capital Allowances can be used to reduce their overall tax liabilities. I explained that these allowances can also be used against any other income stream, which was pertinent, as both Adam & Frances have alternative sources of income, apart from their properties.

I agreed to attend one of the Long's addresses in London which housed 9 separate private flats. The building was purchased for around £1.2M and is located in Islington. I explained, prior to my visit, that Capital Allowances tax relief does not apply to 'dwellings' and as such, only certain Plant & Machinery items within the communal areas of the building, would qualify for tax relief.
Having undertaken the financial assets survey of the building, it was clear that the only communal areas of the property were the access hallways. These housed the utility meters had lighting, some soft furnishings and fire precaution installation. Although not a large claim due to the relatively small communal areas, qualifying assets of £35,000 were identified, and could therefore be used to mitigate their tax liabilities.

I had also explained that once the assets had been identified, logged and valued, one could use these allowances to amend previously submitted tax returns. This means that refunds of tax paid can be recovered. The time limitation is restricted to ownership of the properties or 5 years and 10 months. This can be a very valuable tool, as it can mean potentially large sums of money can be recovered.

The following week, I arranged to meet Adam & Frances at their HMO properties located in Bishop Stortford, and Chelmsford. All of these properties are what I consider to be 'traditional' HMO's. They have private rooms for the tenants, but all share a Kitchen, Bathroom, WC, storage, access, lounge and dining areas.

All 3 of these properties were purchased directly from the developer, and are completed to a very high standard.

£120,000 of allowances were identified over the three properties. This represents around 19% of the combined purchase price.

The allowance of £120,000 is treated as a business expense, and can be 'set-off' against general income of the individual. Effectively, extending ones tax free income by £120,000. If one was a higher rate tax payer, this would currently represent £48,000 in taxation savings or refund.

As Adam and Frances are join owners of these properties, the Allowances are usually split 50:50. However, if partners were to enter into a 'partnership agreement' (under the guidance provided by HMRC in “PIM103 – Introduction: Jointly owned property & Partnerships”), then the allowances can be apportioned on the basis of the agreement. This would mean that all of the allowances could be allocated to the higher/only tax payer of the couple. A useful tip!

To contact Adam & Frances Long to discuss how Capital Allowances have been utilised, or to discuss their property provisions, please call 01992 660 391 or e-mail quickbuyhomes@ntlworld.co.uk or visit their website www.quickbuyhomes.co.uk