University property - A way to generate returns and save income tax

PRLog (Press Release) - Sep 01, 2011 - According to accountancy firm Saffery Champness, based in Clifton, investing in residential accommodation for their children whilst they are students could allow parents to minimise Income Tax, generate capital growth, and pay their kids an allowance in a tax-efficient manner.

Richard Cartwright, partner in the Bristol office of Saffery Champness explains:

“The recession and continued uncertainty in the economic environment have placed unprecedented pressure on parents whose children will be starting university in 2011. Pay freezes and falls in asset values may mean that parents have less disposable income to fund a child’s studies, and the introduction of the 50% tax rate has been a further slap in the face for many.

“Correctly structured, an investment in residential property in a university town can do much to alleviate these pressures. Parents should consider purchasing a house and gifting 1% of the ownership of the property to their child. They can then enter into a partnership agreement allocating their child 100% of the profits stemming from letting the property. This income, which can be used to pay for fees and subsistence, will be assessed on the child. As the child is unlikely to have significant other earnings, this will result in zero or minimal tax.

“Any capital gains made on the property will also be assessed under the Capital Gains Tax regime, resulting in a maximum tax rate of 28%. If the money were invested in an income generating product, it could be taxed at a rate of up to 50%.”

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Taxman Eyes Luxury Property

PRLog (Press Release) - Aug 09, 2011 - Robson Laidler LLP, Accountants, are reporting that in a bid to squeeze the last possible penny out of taxpayers, HMRC is scrutinising Land Registry data on house purchases and sales to check people are not avoiding Capital Gains Tax on property disposals or tax on rental income for example.

Graham Purvis from Robson Laidler said “This may affect those who receive a gift or inheritance to buy a property, or who use this money to pay a sizeable amount off their mortgages.”

“Figures released last month show that HMRC is also actively targeting estates and beneficiaries for underpayment of Inheritance Tax (IHT). Last year, the taxman investigated 9,368 house price valuations and clawed back almost £70 million in IHT”.

IHT is levied at 40 per cent where the assets, minus any debt, of a person’s estate exceed £325,000, or £650,000 for couples.  Estate beneficiaries, who are often the children and families of the deceased, face penalties of up to 100 per cent of the additional tax liability, in addition to the tax due, if HMRC investigates an IHT property valuation and finds it is too low because sufficient care was not taken in obtaining it.

If a property is sold for less than the valuation, the estate can come back and ask for the value to be revised.  Executors and beneficiaries are being advised to get several written valuations from professional valuers or chartered surveyors.

HMRC has said that it would open an inquiry based on a series of risk factors; part of the remit of an inquiry would normally be to check whether the declared income correlated to the individual’s lifestyle.  In the case of cash gifts, they would look for evidence such as a copy of the donor’s bank statement.

When giving money away, it is suggested that donors pay by bank transfer and have supporting documentation to give to their lawyer and accountant, as many people will have no provable record of making these gifts to children or grandchildren.  Gifts of unlimited amounts can be given to individuals free of tax if the donor then lives for another seven years.

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Grosvenor Systems User Group Plans Future Development Of Propman Property Management Solution

Grosvenor Systems User Group Plans Propman UpdatesPRLog (Press Release) – Jul 27, 2011 – Grosvenor Systems, the creator of Propman, one of the leading property management and accounting software solutions, held its Annual Strategy Group Meeting at Lords Cricket Ground in London on July 8th.  Attended by over 100 clients, this event provided a forum for users contribute towards the ongoing product development as well as the opportunity to network with other Propman users, sharing benefits and tips of using this market leading software solution.

“Currently celebrating its 20th anniversary, Propman is now one of the property software sector’s longest established property management and financial accounting software solutions,” commented Nic Dodwell, Managing Director of Grosvenor Systems.  “Key to its success has been a continued cycle of product development driven by feedback from users at our Annual Strategy Group.  This has ensured that we continue to meet their current and future requirements whilst keeping pace with the rapidly changing property market.”

This annual event was attended by organisations across all sectors of the property market, including many of Grosvenor System’s long standing clients giving them an opportunity to play a key role in the future development of Propman.  This year, users were asked to prioritise the major enhancements and determine a set of key performance indicators (KPI’s) that they would like to see in the next major release.  In addition, some clients gave presentations sharing tips for making best use of Propman from both a property database and an accounting point of view.

According to Greg Smyth, Managing Director of GCS Property Management Ltd:  “Any business that is happy to bring all of its clients into one room must be doing something right.  We have been pleased to play such a proactive role in the ongoing development of Propman.  Over the past four years our business has grown by 20% per annum and it is difficult to imagine how we would have coped with such an increase without this powerful property management software tool which has automated so many of our workflow processes.”

“This Annual Strategy Group Meeting gives us the opportunity to influence the future development of this user friendly software solution”, added Stephen Jones, Finance Director at The Centaur and Barclay Property Group.  “Propman ensures that we never miss any rent reviews or lease expiries whilst being able to manage the financial and property aspects of more than 40 separate legal entities with a single user logon.”

About Grosvenor Systems
Founded in 1991, Grosvenor Systems is one of the UK’s leading developers of integrated property management and financial accounting software solutions for owners, agents and occupiers. With a client-focused approach to developing the Propman system, the company has ensured that it remains at the leading edge of property management software and continues to meet the rapidly changing demands of the property sector. For further information, please visit www.grosvenorsystems.com

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