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TAX CHANGES TO CONSIDER Tom Ogden of HOLLINGDALE POOLEY considers the tax changes for buy-to-let landlords from 6 April 2016 Following the summer budget of 2015, a number of changes were announced which may have considerable tax consequences for many landlords. For many years, the calculation of profits from a ‘property business’ has been calculated using normal business tax rules. Consequently, mortgage interest paid on buy-to-let mortgages, often the greatest expense of a property business, has been an allowable expense. By the end of this parliament, an individual’s taxable property income for tax purposes will not be calculated after a deduction for mortgage interest. As a result, many buy-to-let landlords that have large rental receipts that are offset by high mortgage interest repayments are likely to be pushed into higher or even additional rate tax bands. In place of the current deduction will be a flat rate 20% mortgage interest relief deduction, regardless of the individual’s total income. Transitional rules will apply over the next four tax years to soften the blow for landlords, with the old rules phased out and new rules phased in. Another significant change has been made, that will specifically affect landlords with furnished properties. For many years, a fixed deduction equal to 10% of rent (less any costs paid directly by the tenant) was deductible from an individual’s taxable property income on their furnished lettings to compensate for wear & tear on soft furnishings and moveable furniture. This has now been abolished, with landlords able to claim actual expenditure on replacement items only. This may be favourable to some landlords, particularly those letting partially furnished properties that may not have claimed the 10% allowance previously. However, it will require landlords to document expenditure rather than rely on the flat rate deduction. For individuals that rent out rooms in their own home, the annual amount that can be received before tax becomes payable has been increased significantly, from £4,250 to £7,500 per annum. For individuals with rents from their own home under this limit, the amount will be available as an exemption or for those with rents over this limit, only the balance of rents received over the limit will be subject to income tax. To discuss how the changes to property taxation will affect your property business please contact Tom or one of our partners for a free initial consultation, or email enquiries@hollingdalepooley.co.uk
WHOLE LOTTA A
Wæs hal! Historian Julian Lea-Jones explores a little piece of the city’s history
T
he pagan practice of wassailing traditionally took place each New Year, when villagers danced and sang in the orchard to frighten away bad spirits and thank the good spirits for the trees’ wellbeing. This ceremony was reintroduced in Bristol by one Frank Buckley, a barrister, at his own orchard, and has since been performed by community orchards and, in recent years, even owners of commercial cider apple orchards – feeling, as our forefathers did, that wassailing improves their harvest. A modern twist includes the firing of shotguns or fireworks into the branches to frighten away bad spirits. But what of the meaning of wassail? The Anglo-Saxon wassail bowl – a cup of mead, cider or spiced ale drunk on New Year’s Eve or Day – was derived from the everyday greeting ‘wæs hal’. With hal being the ancestor of the modern English word hale, wæs hal literally meant ‘be healthy!” This gradually contracted to wassail, referring to the act of toasting someone’s health. In accordance with papal instructions, missionaries to these shores Christianised the pagan ceremony by renaming the wassail bowl, ‘Poc’ulum Carita’tis’ (The Loving Cup), a name still used by London livery companies and fraternal organisations, while universities and colleges generally call it The Grace Cup. At least one toasting ceremony regularly takes place today in Bristol, and although it is usual for grace, in the form of a short thanksgiving prayer, to be said before a meal, the Grace Cup usually accompanies a parting grace. The Pledge Cup ceremony meanwhile, used by some organisations, reminds us of the assassination of King Edward (Edward the Martyr) at Corfe Castle on 18 March AD978 – when he took the proffered cup, his arms were held and he was stabbed in the back. In this modern ceremony, the cup is passed around the table with each drinker pledging the safety of the next by turning to guard their back, until all have safely partaken. Here in Bristol in 1599, a large silver gilt Grace Cup was given to Queen Elizabeth's Hospital by the widow of William Byrde the Younger as a gesture of his affection. The cup, about 37cm tall, surmounted by a female figure bearing the Byrde coat of arms, is still in use at Bristol's civic banquets. In 1854 it was used at the enrolling of his Grace, the eighth Duke of Beaufort as Bristol’s Lord High Steward. His Worship then drank the toast, following which the toastmaster Isaac Niblett, landlord of the White Lion Inn, called out in stentorian tones; “The Grace Cup goes round”. On 20 June 1986, a similar ceremony took place when John James, Bristol’s principal 20th-century benefactor, used the same cup in a ceremony at QEH to commemorate both his visit and the 400th anniversary of the death of the school’s founder, Bristol merchant John Carr. The ceremony and use of the Grace Cup to mark the affection and esteem in which the school holds John James, was doubly appropriate as it had been given as a gesture of affection 387 years before. n
The Grace Cup, from QEH School
Hollingdale Pooley Bramford House, 23 Westfield Park, Clifton, Bristol BS6 6LT Tel: 0117 973 3377 www.hollingdalepooley.co.uk
THEBRISTOLMAG.CO.UK
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JUNE 2016
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THE BRISTOL MAGAZINE 61