“No-fault” evictions to be banned

by Admin | Jan 7, 2023 | Litigation

A government white paper published on the 15th of June 2022 has set out reforms set to impact the private rental sector.

These reforms include the banning of a section 21 notices, i.e. the ability of landlords to terminate a tenancy by giving notice without giving a reason for termination.

This will be introduced with the aim of providing tenants with greater security in respect of their tenancy and removing tenants’ fear of having their tenancy terminated if they raise a complaint regarding the condition of the property.

New grounds will be introduced to ensure responsible landlords still have a degree of flexibility to terminate a tenancy under the following circumstances:

Where the Landlord wishes to sell the property
Where the Landlord wishes to occupy the property, or a close family member will occupy (although this will only bite after 6 months has passed)
Serious repeated rent arrears – if the tenant has dipped in and out of 2 month rent arrears. Tenant must have been in 2 months’ rent arrears on 3 occasions within the last 3 years.

Further reforms include the introduction of the private landlord’s ombudsman, of which membership will be compulsory. This will provide tenants with an out of court procedure to pursue landlords for any grievances and provide a further level of accountability to tenants.

There may also be further reforms in the pipeline:

Landlords limited to annual rental increases, with the requisite notice period doubling
Landlords no longer able to reasonably withhold tenant’s request for a pet
Landlords no longer able to place a blanket ban on renting to families in receipt of benefits and/ or families with children.

At Thirsk Winton we are always happy to assist with your legal property queries. If you require any legal advice regarding landlord and tenant concerns please feel free to get in touch.

Written by Jessica Egan

The tax benefits of ownership of property by onshore or offshore residents through
an overseas company have not only been removed but such companies are now more
heavily taxed.
Overseas companies must also now register at the UK Companies House as an
overseas entity disclosing information on a public register about beneficial owners or
managing officers. These rules also apply where the beneficial owner is a trustee of a
trust.

Now that companies are caught by tax rules relating to ATED (Annual Tax on
Enveloped Dwellings) which affects properties valued at as little as £500,000,
Corporation Tax currently at the rate of 25% and potentially Inheritance Tax, most
owners of offshore companies will wish to transfer their property out of the company
structure, usually into individual names or a trust. This can offer an opportunity for
some inheritance tax planning usually by making a lifetime transfer of the property
to family members.

The good news is that SDLT (stamp duty land tax) will be exempt in most cases
provided that the correct procedures are followed.
It is advisable to take tax advice on the range of potential taxes that can arise from
de-enveloping a property.

3 people from a company planning the sale of their business with a solicitor from thirsk winton

HOW TO DE-ENVELOPE

There are usually two ways of proceeding:

1. Pass a company resolution and transfer the property to the shareholders or their nominees by way of a distribution in specie (in kind). This will be exempt from stamp duty land tax (SDLT) provided that it is a voluntary transfer for no ‘chargeable consideration’.
2. Pass a resolution to put the company into voluntary liquidation and carry out a distribution in specie.
The second way will be the more costly since there will be the costs of the liquidator to take into account.

The articles of association must be checked to ensure that a distribution in specie is permitted. If not, the articles can be amended by passing a special resolution. The resolution must be carefully worded if exemption from SDLT is to be claimed. It should not be worded as a cash value dividend equal to the market value of the property to be settled by a transfer of assets.

In order to avoid having to pay SDLT, there should be no third party debt or mortgages over the property. The directors will need to check that the company has sufficient assets to make the distribution and there are no outstanding creditors other than any debt that may be owed to the shareholders themselves.

For overseas companies, a legal opinion may be required from lawyers practising in the jurisdiction as to the legality of the actions being taken in order to satisfy the requirements of the Land Registry.

Our expert solicitors will be pleased to advise and guide you through your transaction. Please contact Alan Zeffertt if you would like assistance:

E: azeffertt@thirskwinton.co.uk

T: 020 7043 1621

M: 07968 190951

Disclaimer: The information in this article is for general information only and reflects the position at the date of publication. It does not constitute legal advice and should not be treated as such. It is provided without any representations or warranties, express or implied.

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