Weekly landlord news digest: Issue 39

This week in our landlord news digest, brought to you by Hamilton Fraser Total Landlord Insurance, we cover the latest news and important updates in the private rented sector.

How much inheritance tax will your loved ones pay on your property investments? If you don’t know, you are one of the increasing number of landlords who may need tax advice, according to financial firm Equiniti.

In other news, the government has issued new guidance on Right to Rent checks and councils have been making concerted efforts to crack down on letting agents and landlords breaking house in multiple occupation (HMO) laws.

Landlords should be concerned about inheritance tax (IHT)

A new report, carried out by Equiniti, suggests that residential property makes up more than half of the total £80 billion of national wealth inherited by families and loved ones each year. Of the £80 billion, inherited property made up £43 billion, while the rest was made up of cash, investments or other assets.

The study also revealed that those with an estate in excess of £2 million pounds, who are passing down housing wealth, hold an average property fortune of over £1.6 million.

The figures revealed by the report raise concerns over how well property owners are managing their tax in the later stages of their lives.

Equiniti’s Stuart Simpson believes the figures demonstrate how crucial end of life planning is for people approaching later life to avoid inheritance tax.

“For estates to be holding nearly £70,000 in cash at the point of death raises questions about how people are handling their finances in later life. Even through the process of probate, this wealth will be eroded through inflation, while a pot of money held in cash throughout retirement will suffer more serious problems”
– Stuart Simpson, Equiniti

In order for landlords to ensure that their families and loved ones inherit as much of their hard-earned wealth as possible, it is important to manage tax correctly.

Hamilton Fraser Total Landlord Insurance offers an informative guide for landlords to learn how they can manage their tax.

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Update on Right to Rent scheme

As reported by LandlordZONE, a new guide has been issued which updates the way the Right to Rent scheme checks the immigration status of tenants. Mr Justice Spencer suggested that the original scheme had “little or no effect” on its main aim of controlling immigration, and even if it did, it was “significantly outweighed by the discriminatory effect”. He added that evidence strongly showed that the scheme was causing landlords to discriminate against potential tenants and appeared to be having a “real effect” on people’s ability to find accommodation.

Following this, the Home Office has now released a new factsheet to help landlords in England to comply with the law and complete Right to Rent checks.

The changes affect international prospective tenants visiting the UK from Australia, Canada, Japan, New Zealand, Singapore, South Korea, and the USA who have crossed border control through ePassport gates.

Nationals from these seven countries, who are staying for up to six months, can rent a property during their stay. The new Right to Rent guide states that landlords can check these tenants’ status through:

  • A boarding pass, or electronic boarding pass for air, rail, or sea travel to the UK
  • An airline, rail or boat ticket, or e-ticket
  • Any type of booking confirmation for air, rail or sea travel to the UK
  • Any other documentary evidence that establishes the date of arrival in the UK

However, if a tenant in these circumstances wants to rent for longer than six months, they will need to provide their landlord with evidence of a visa in their passport and a biometric residence permit.

The Home Office states that if a letting is for less than three months, it will be classified as a holiday let, and this would remove the requirement for Right to Rent checks.

When do HMO offences take place?

The High Court has enforced charges on an unlicensed house in multiple occupation in Luton.

The court’s goal was to determine the date the offence took place with the purpose of confirming whether council enforcement action papers were served in time.

Previously, a district judge had ruled the case out of time, but Luton Council appealed the verdict.

The law says information for the case must be laid within six months of the date of the offence.

The landlord argued that the papers should have been processed by 10 October 2017, when the council first visited the HMO, rather than by 16 October 2017, which was six months after the officer’s last visit in May 2017.

The court ruled that as renting out an HMO without a licence is a continuing offence rather than taking place on a specific day, the case was brought in time.

The appeal was upheld.