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Change in Capital Gains Tax Rules for Non-UK Resident Landlords

Change in Capital Gains Tax Rules for Non-UK Resident Landlords

Change in Capital Gains Tax Rules for Non-UK Resident Landlords

Last month – 6th April 2015. the legislation concerning Capital Gains Tax (CGT) for Non-UK resident landlords came into force, which may seriously affect Non-UK property owners when it becomes time to sell their property assets in the UK.

Any sale of residential properties in the UK concluded before the date of the legislation change, whether the property concerned was a main residence or an investment property and owned by Non-UK resident, should not incur any additional tax charges. 

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As a landlord did you know that there are legal requirements regarding tenant’s belongings or that the landlord is legally obliged to provide storage solutions for personal possessions for a period of time following abandonment?

The subject is commonly discussed by UK landlords and usually centres on personal possessions left in rental property and what to do with them.

Frequent scenario’s include:

  • Tenants complaining that the landlord has seized their belongings and refuses to give them back until they pay overdue rent money owed.
  • Landlords asking what to do with a tenant’s personal belongings when they have left the property.

A landlord cannot by law withhold a tenant’s personal belongings in lieu of any monies owed. If a tenant owes rent to the landlord, then the correct way to recover the sum is through the county court in possession proceedings or as a separate action for a money judgment.

If a tenant leaves their belongings in the landlord’s property, as harsh as this may seem a landlord is under a legal obligation to take care of tenant’s possessions.

Protecting, removal and storage of uncollected goods can result in extra costs that the landlord doesn’t want but the Torts (Interference with Goods) Act 1977 does provide some guidance.

The same law covers both situations.

There used to be a law called ‘Detinue’ that allowed landlords to hold on to personal belongings when a tenant owed them rent, but this was abolished by the Torts (Interference with Goods) Act 1977

The landlord may have a legal obligation to protect, remove and store a tenant’s possessions resulting in extra costs that the landlord doesn’t want but be advised that if a tenant appears to have abandoned their belongings, it could be argued in court, that the goods left could be evidence of the tenants intention to return and therefore the property was not officially abandoned.

This can be a real headache for landlords who often change the locks on the assumption that the rental property has been abandoned. However, if the tenant subsequently turns up, the landlord could be considered by the courts, to have illegally evicted the tenant. So landlords are urged to act cautiously.

It is good practice, when signing up a new tenant, to collect alternative contact details of relatives or friends who a landlord can contact in the event of having goods left in the premises.

In theory it is possible to insert a suitable clause into a tenancy agreement to set out contractual obligations regarding this, but it is advisable to use a formal notice of collection of goods as well to avoid any possible come backs.

In the event that there is a dispute about ownership of the goods that are left, landlords cannot dispose of goods until the matter is resolved.

If the landlord intends to dispose of the goods left in a rental property then, by law the landlord must give 21 days notice before disposal. If the tenant owes money to the landlord BEFORE service of the notification then the landlord is obliged under the law to keep the personal belongings for at least 3 months before sale or disposal.

The landlord is entitled to sell the goods and keep any reasonable costs that were incurred for storage, removal or sale. The law expects the landlord to obtain the best price they can and then return the amount beyond the landlord’s costs to the tenant.

It is unlikely that tenants absconding or abandoning rental properties would leave expensive items behind, usually it is just junk or old clothes and broken furniture so the likelihood of recouping funds owed through the sale of items is often slight in most cases.

The landlord requirements on this matter may seem particularly onerous but this is just one of the many frustrations faced by private rental sector (PRS) landlords, it goes with the territory. Landlords can make good money but it is not necessarily easy money and the protection of a tenant’s goods is just one area where landlords need to operate within the boundaries of the current legislation.

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