In real estate, there's no one-size-fits-all solution.
Complicated tax laws, rising costs, market uncertainty. Today’s real estate and construction businesses face a number of issues.
Despite having similar challenges, what works for one group won’t for another. This is because there are unique circumstances surrounding each property and business. To reduce risk and stay competitive, you need technical advice that offers solutions tailored to your needs.
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Tax planning and compliance
Leverage our industry knowledge to make the most financially sound choices. Enjoy peace of mind knowing that you fully comply with local regulations. We provide guidance in the following areas:
- VAT advice
- Making Tax Digital (MTD) compliance
- Transactional tax
- Tax planning on property vehicle structuring
- Capital allowance
- Land development
Stamp Duty Land Tax
Stamp Duty Land Tax (SDLT) is a progressive tax paid when purchasing property in England and Northern Ireland.
The current SDLT threshold is £250,000 for residential properties and £150,000 for non-residential land and properties.
As of April 2016, those purchasing a second home or buy-to-let property pay higher SDLT rates.
Property Inheritance Tax
In the UK, inheritance tax is charged if the value of the estate exceeds £325,000.
However, you can pass your home onto a spouse or civil partner without the need to pay inheritance tax on the property.
If leaving your property to children or grandchildren, then the tax-free threshold for inheritance can increase to £500,000.
Capital Gains Tax
Capital Gains Tax is paid on the profit made from selling an asset that has increased in value, such as second homes and buy-to-let properties.
In the UK, you pay a different capital gains tax on residential property than you do on other assets. The rate you pay also depends on your tax bracket – higher rate taxpayers, for instance, pay 27%.
Auditing, accounting and advising on payment schemes
Our clients benefit from best practices and industry-leading insight.
- Tailored auditing services
- Service charge accounting
- Construction Industry Scheme (CIS) advising
- Banking reviews
- Financial appraisals and project assurance
- Cash flow and budgeting
The Construction Industry Scheme (CIS) is an HMRC tax requirement for contractors and subcontractors in the construction industry.
Under CIS, contractors deduct money from subcontractor payments. These deductions are advance payments toward the subcontractor’s tax and National Insurance.
This anti-fraud procedure is designed to tackle prevalent fraud in the construction sector.
Under Domestic Reverse Charge (DRC) rules, the customer is liable to pay the VAT to HMRC, and not the supplier.
Loan to Value (LTV) measures how much money you’re borrowing compared to the total value of a property.
So, if you borrow £90,000 to buy a home worth £100,000, the LTV is 90%.
Most lenders price their mortgages according to LTV bands. So, the lower your LTV, the less interest you’ll likely be charged.
Real estate and construction advisory
Our broad range of expertise enables us to provide advice across real estate, including social housing, land and property development, construction, property investing and more. We know the right questions to ask, guaranteeing assurance on real estate investments.
Option to tax land and buildings
Looking to charge VAT on the sale or rental of commercial property? If you meet the right conditions, HMRC gives you the option to tax land and buildings.
Introducing these charges can involve submitting the right tax form or getting special permission from HMRC.
The golden brick
Did you know that the sale of a new dwelling is zero-rated? so, no VAT is charged on the sale. According to HMRC, a partially completed dwelling is defined as having at least one brick above foundation level - this is often called the "golden brick".
Golden brick properties can often be sold without incurring VAT.
How we're supporting real estate clients
In all my working life I have never been enlightened so much as I have with the support Phil and the team at Kreston Reeves have given me. February 2020 saw the launch of CT11 Construction and then COVID happened – the daunting thought of not being able to trade and missing out on the support of the Coronavirus Job Retention Scheme while in the first national lockdown. The Kreston Reeves team guided me throughout the pandemic enabling me to find opportunities during this crisis. Whether it was through achieving short term financial support, winning new contracts, or completing CHAS accreditation. They supported me with knowledge and empathy which I found outstanding, something I’ve never experienced from a professional services firm before. They showed me dignity, integrity and humility through a very challenging time for everyone. There would not be a shadow of a doubt that I would recommend you to any one I can. The trust I have for your team is unquestionable.
Darril Edwards, Director, CT11 Construction and Developments Ltd
Allan Pinner has been involved in providing financial advice to the company for more than 25 years and we feel fortunate to have enjoyed the benefit of Allan’s experience and attention to detail over the many years he has been involved with our financial management. Allan's detailed knowledge of our business has enabled him to provide support and expertise with our tax planning both corporate and personal and to advise on the preparation and presentation of the companies annual accounts. Allan has always shown a deep interest in the business and we have always enjoyed the confidence of his understanding of our needs.
David Shilton, Chairman, Shilton Group Holdings Ltd
Whilst we knew what we wanted to achieve for both parties, Kreston Reeves “plugged the gaps” to ensure all pertinent commercial and taxation areas were covered to help achieve a successful outcome for everyone on time!
Ian Savage, CEO, Chartway
I am a landlord with three buy-to-let properties. I have an appreciation of finance but my career was in marketing not in accountancy. I have taken advice from various accountants and so-called tax experts in the nine years I have been a landlord, and have always done my self-assessment tax returns myself. I recently saw a presentation by Jo White, a Tax Consultant with Kreston Reeves, and it immediately became clear that here was someone who really understands the tax affairs of landlords – capital allowances, allowable expenses, and exactly how to fill in tax returns. I had a free initial consultation which only confirmed my thoughts. I am going to pay for Jo to re-do my last tax return, and she has already mentioned things which I didn’t realise I could claim for, which will more than pay for their fee. She will also be helping me minimise the Capital Gains Tax which will arise when I start to sell my properties. I would thoroughly recommend Jo White of Kreston Reeves to any landlord.
David Horton, Landlord
Kreston Reeves provide a professional and bespoke audit service tailored for the National Federation of Builders. We have appreciated their support and advice as we develop and grow our membership. James Peach and the audit team are aware of our needs and have flexibility in their approach to matters. In addition to the audit they support us on tax matters including queries those related to our non profit mutual trading status when I joined the company. I am very pleased with the service and support provided by Kreston Reeves and can strongly recommend them as audit advisors.
Brian Phoenix, Finance Director, National Federation of Builders
Since 2014 Kreston Reeves has prepared the corporation tax return for Cemex UK Operations Ltd, the main trading company for our UK construction business (production and supply of cement, concrete, aggregates and related products). Every year the staff at Kreston Reeves work to a high standard, dealing with our accounting staff to extract the numbers needed for an accurate tax return in our often complex business. Kreston Reeves has also supported our in-house tax team with advice on an ad hoc basis covering items such as Corporate Interest Restriction, divestment advice and also support on general compliance following the change in UK GAAP. The firm provides an excellent level of service with a friendly, helpful and knowledgeable tax team. I have no hesitation in recommending their services.
Imogen Parsons BA (Hons), FCCA, CTA, Tax Manager, Cemex UK Operations Ltd
We approached Kreston Reeves at a difficult time in our practice, they were very professional and reassuring in their unwavering support of our business, with timely advice and guidance provided. During and after Covid-19, it became clear that a new succession strategy had to be developed, without the help and expertise of Kreston Reeves this would have been difficult to achieve. Following a period of engagement at different levels, including mentoring and client workshop sessions, a clear pathway ahead emerged which has recently been accomplished. After 60 years in business, the Evans & Langford team are now looking forward to engineering the future, as part of the larger multi-disciplinary RB Plant Group. This is an important and very positive outcome of a fruitful existing relationship, where there is great synergy and cultural fit between the two companies.
Simon Robertson, Director, Evans & Langford
A big benefit for me of working with Kreston Reeves, and one of the things that impressed me recently, was we were very close to making a decision on one of the company structures that was needed, and we were very heavily guided by legal advice. But when we started to quantify it, and this was only down to Kreston Reeves who pushed us to do this, we saw the magnitude of the financial and tax implications. It’s their tenacity that pushed us to do this. Even as their client they didn’t accept no from us, and they intuitively knew what was the right thing to do and we were heading in the wrong direction. It’s that tenacity that we’re glad they have because if we had just gone with our feeling and using legal advice purely it would have been the wrong thing to do.
Mark Dodson, CFO, Otterpool Park LLP
Kreston Reeves were introduced to us through a referral from the bank when we were looking for new Accountants and Auditors. Over the last 4 years, Kreston Reeves have not only assisted in the Accounts preparation and audit, but also provided advice and guidance on other business matters. Kreston Reeves have been able to assist in a vast manner of items to date and there is also a confidence now that should we require something other than the norm, they will be able to help. Kreston Reeves have helped to ensure a smooth growth trend in terms of reporting requirements and also provided invaluable guidance on acquisition opportunities.
Sagar Bakhai, Finance Manager, Associated Asphalt Contracting Ltd
We use Kreston Reeves for tax advice because they are a local firm that are large enough to have the expertise to answer all of our tax queries but not so large that we don’t receive a personal service, they have helped us on IR35, VAT and Corporation tax issues. Kreston Reeves stand out as they deliver a personal service, give good advice and deliver this in a manner that non-tax experts can understand. It is re-assuring for us to know that we can rely on Kreston Reeves for all of our tax advice no matter how big or small that task is.
Ian Perkins, Group Chief Financial Officer, Gallagher Group
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