All My Net Biz

Tax accountants are advising buy-to-let investors to make sure their tax affairs are in order – because they are probably paying too much.

Despite reports of a crackdown on buy-to-let, with lurid headlines about tax inspectors trawling the small ads in local papers for undeclared lettings, very few landlords are evading tax, according to tax accountants in the sector. The more usual problem is that they miss out on many allowances that could slash their tax bills.

Amateur landlords overpay the most because they will not take the time to do the job properly, according to accountant Arthur Weller of www.property-tax-portal.co.uk.

“Lots of buy-to-let landlords have other main income and the property is just a sideline, so they don’t apply themselves to running it in the same way that they would if it was their main business,” he says. “In addition a lot of people slide into property investment more or less accidentally, when they let out their home instead of selling it when they move.”

The pitfall that most amateur landlords fall into is failure to keep proper records. “There are complicated rules about a main residence that has been let out and then sold, and you can save an enormous amount of tax by getting it right,” Weller says.

Many allowances are available that non-specialists rarely appreciate, mainly in areas where the Chancellor has decided to promote social aims, such as bringing empty flats above shops back into use.

“There are allowances for converting business premises into flats and you can save VAT when converting non-residential premises into homes,” Weller says. “Many people do not realise you can claim 10 per cent for wear and tear.”

Another common failing is to assume that verbal agreements are binding when it comes to the Inland Revenue.

“It is essential to make agreements on who owns what in writing,” Weller says. “Families often make verbal arrangements around the kitchen table, but these days many families break up and cannot agree on what was said.”

Leonie Kerswell, private client tax partner with PricewaterhouseCoopers, sees many investors who have failed to keep notes of maintenance work and other costs such as insurance on their properties. Many items may seem trivial at the time – who, for instance, keeps the receipt for a packet of screws from B&Q costing 1.30?

“Keep very good records – it can all mount up to several thousand pounds by the time you calculate the tax bill,” Kerswell advises.

A considerable amount of tax can be saved by setting up the operation correctly in the first place. Borrow as much money as you can, Kerswell says, because interest is tax-deductible but capital repayments are not. Make absolutely sure you are only claiming the interest, however. Wrongly claiming tax relief on capital repayments is the main focus of tax investigations into buy-to-let.

“If you are married, try to take advantage of the large allowances of the lower tax paying spouse,” Kerswell says. “Remember that losses on one property can be offset against profits on another.”

But the best advice is to get professional advice. After all, the accountant’s fee is itself tax-deductible.

Unfortunately, good professional advice is oftdifficult to find, says Chris Town of the Residential Landlords Association.

“Getting good advice is not always as easy as it sounds, because there’s a shortage of accountants who are up to speed on our sector,” he says. “Once you have someone who understands that it needs to be approached as an investment business not a trading business, you are on the way to achieving a realistic tax liability.”

Do the maths

Arthur Weller’s top five rules for landlords to swot up on:

* Principal permanent residence relief

* Furnished holiday lettings

* Capital allowances

* Allowable interest

* VAT

The European Central Bank (ECB) today raised the benchmark European lending rate to 4%, its highest level in six years. The move came amid fierce opposition by European politicians who rightfully fear that higher interest rates will only send the Euro higher against other industrialized currencies and crimp the European economy. The Euro is hovering around record levels against the USD, Japanese Yen, and Chinese Yuan, even though its economy is probably the weakest of the bunch. However, the nature of the European Union means the interests of all member countries need to be looked after; while many of the traditional European powerhouse economies are struggling, Eastern Europe, for example, is thriving. Taking matters into his own hand, Frances new president, Nicolas Sarkozy, is threatening to legislate a forced decline in the Euro, and many analysts think he may succeed. The Telegraph reports:

Sarkozy and Prodi are not going to let go of this. There’s a groundswell of feeling that Europe is being taken for a ride by the rest of the world, and they’re not going to put up with it any more.

Read More: http://www.telegraph.co.uk/money/main.jhtml?xml=/money/2007/06/07/ccecb107.xml

Waterfront living doesn’t come much better than Sally Arthur and Sam Morrison’s pad. Located right in the heart of Bristol, it has great views of the city’s freshly regenerated docks, and despite being five minutes’ walk from the city centre, it’s as quiet here as at any country retreat.

The couple moved on to their wide-beam canal boat in Bristol Marina when they got together four years ago. “I’d been sharing in houses of eight, and I felt like I was getting too old to live with loads of people. A canal boat seemed like the only way to get a place of your own with the money we had to spend,” says Sally, 35. “Sam was living on a boat already, in London, and I fell for him - and for his boat, really.”

For many, it’s hard to imagine that inhabiting a canal boat could score for you in the eligible-bachelor stakes, but living afloat has never been more attractive. As house prices continue to rise, many Britons are choosing a life on the water.

British Waterways, the agency that operates most of the country’s canals and navigable rivers, has announced that it needs to create 11,000 new berths for canal boats in the next decade to keep pace with demand, which has doubled over the past six years.

Despite this investment, finding a mooring can be extremely difficult, particularly in the South-east of England.

“The number of people buying boats has been increasing steadily for many years,” says Jonathan Ludford of British Waterways. “Unless new boaters plan to cruise continually around the waterways network, they will need to secure an appropriate mooring. Available residential berths are few and far between and often have long waiting lists.”

There is, he says, no fast track to securing a mooring: it’s a case of getting on the waiting list for as many private marinas and waterways as possible in your chosen area. The more popular the location, the further in advance you need to plan, and in London it could take three years or more. But it is essential to secure a mooring before buying a boat – doing it the other way round is one of the most common mistakes boat-buyers make.

Around 15,000 people live on boats in Britain. It has long been regarded as a hippie lifestyle, a back-to-nature type of existence for people who are prepared to dispense with most of their creature comforts. There are certainly disadvantages to living on a narrowboat, the classic canal-boat design. These boats can change hands for as little as 20,000, but they usually bring with them chores such as pumping out the chemical toilet, refilling the onboard water tanks and charging the batteries. But the biggest snag of all is, as the name suggests, that they are extremely narrow.

But with the average house price based on the latest Land Registry figures now more than 200,000, more affluent buyers than ever are choosing a life on the water. Among the wealthiest is Simon Woodroffe, the owner of the Yo! Sushi chain, who bought a houseboat and mooring in Kensington and Chelsea last year for a reported 500,000, certainly less than his not-too- distant neighbours over on Cheyne Walk. With three double bedrooms, two bathrooms and an open-plan living area spread over two decks, it’s a far cry from the boats that line towpaths in the rest of the UK.

Even for the less well-financed, moving on to a boat need not be a claustrophobic experience, or lead to a crisis a few months down the line. Wide-beam boats such as Sally and Sam’s span a more generous 9ft, allowing for more comfortable cohabitation (and fewer relationship tensions). Also, many moorings now allow boaters to “plug in” their craft, supplying the boat with mains water and electricity, and in many instances, broadband internet, cable TV and a telephone line. More established marinas such as Bristol’s feature a laundry and common room, too.

But if the facilities and quality of life is increasing, so is the cost of mooring a boat. The most basic mooring in an isolated spot in the countryside can set you back as little as 500 a year, but city moorings are usually several thousand.

And in a category of their own are London and the South-east, where BW says it has a waiting list of 300. Some people have been waiting for years. BW is currently marketing 12 new moorings in Northolt, west London, on the Paddington arm of the Grand Union Canal. Per year, they cost 5,250 – still, that’s not even half- way to the annual cost of a mortgage on a small one-bedroom flat in most parts of London, though of course that’s before you buy the boat.

Many canal boats on the market do come complete with residential moorings. The mooring can sometimes be transferred to the new owner, for a price: some marinas charge 2 per cent of the boat’s value, while others reportedly extract up to 10 per cent.

A residential mooring, once obtained, comes with a postal address and a council tax bill from the local authority. The good news is that all canal boats are band A.

There are alternatives to a residential mooring. Boat owners can opt for a life of perpetual motion. There are thousands of visitor moorings around the country where anyone is free to moor up for the night. Technically, boaters are supposed to move on within two weeks, sometimes less.

Once you’ve found the mooring, bought the boat (see sidebar) and got insurance, all that’s needed is a licence, usually from British Waterways or the Environmental Agency, which will allow you to cruise Britain’s canals at leisure. And taking your new home for a spin for the first time is one of the pleasures of a life afloat – or is it?

“We’ve been a bit sluggardly,” admits Sally Arthur, who, along with her partner, works in animation. “I think we’ve just made one journey – from the boat yard to here. A lot of people get away for the day but we treat it as a floating home. I think it’s beautiful, here in the marina: incredible sunsets and ducks outside your window in the mornings. It makes you happy a lot of the time.”

How to get afloat

* Some sell for under 20,000, but a medium-sized vessel in good condition with plumbing and electricity will cost from 30,000-50,000. Boats that come with desirable moorings will cost significantly more. Always sort out a mooring before buying a boat.

* When first viewing a boat, inspect the welds on the exterior of the cabin. Cheaply built boats will have wavy cabin sides; top-class hulls will have no visible welds and the cabin sides should be flat. Look out for signs of rust.

* Inside, the smell of rot, streaks in the wood or water marks indicate leaks that need investigating.

* Buying a boat is as fraught with hidden dangers as buying a used car, so it’s essential to have a survey done. They start at a few hundred pounds, but for older boats the hull must be inspected, so the boat has to be craned out of the water, costing up to 1,000.

* Run the engine, and if you don’t know your stuff get a mechanic to come with you.

* Make sure it has a current Boat Safety Certificate – required to get it insured. They run for four years and can cost a lot of money to obtain for an older boat.

* Insurance is usually less than 200 a year. Brokers include Craft Insure (www.craftinsure.com).

* High-street banks won’t lend money to buy a boat as a home. There are a number of specialists, however, who will lend up to 80 per cent of the boat’s value. Lenders include Collidge and Partners (www.collidgeandpartners.co.uk)

* Other useful websites include: The Residential Boat Owners Association (www.rboa.org.uk); The National Association of Boat Owners (www.nabo.org.uk); British Waterways (www.britishwaterways.co.uk); and boat broker Virginia Currer Marine (www.vcmarine.co.uk)

CHICAGO Here’s some good and bad news for chocoholics: Dark chocolate seems to lower blood pressure, but it requires an amount less than two Hershey’s Kisses to do it, a small study suggests.

The new research from Germany adds to mounting evidence linking dark chocolate with health benefits, but it’s the first to suggest that just a tiny amount may suffice.

Volunteers for the study ate just over 6 grams of dark chocolate daily for almost five months Д one square from a German chocolate bar called Ritter Sport, equal to about 1 1/2 Hershey’s Kisses. People who ate that amount ended up with lower blood pressure readings than those who ate white chocolate.

University of Cologne researcher Dr. Dirk Taubert, the study’s lead author, said the blood pressure reductions with dark chocolate were small but still substantial enough to potentially reduce cardiovascular disease risks, although study volunteers weren’t followed long enough to measure that effect.

The research involved just 44 people aged 56 through 73, but the results echo other small studies of cocoa-containing foods. Cocoa contains flavanols, plant-based compounds that also are credited with giving red wine its heart-healthy benefits.

One problem is chocolate bars containing cocoa tend to have lots of calories, so Taubert and his colleagues tested small amounts containing just 30 calories each.

The study appears in Wednesday’s Journal of the American Medical Association. It was funded by University Hospital in Cologne.

The results are interesting but need to be duplicated in larger, more ethnically diverse populations, said Dr. Laura Svetkey, director of Duke University’s Hypertension Center.

She stressed that the study results should not be viewed as license to gorge on chocolate.

“I would be as happy as the next person if I got to eat more chocolate,” she said, but cautioned that weight gain from eating large amounts of dark chocolate would counteract any benefits on blood pressure.

Study participants were otherwise healthy and mostly normal-weight German adults with mild high blood pressure or pre-hypertension, which includes readings between 120 over 80 and 139 over 89.

Average blood pressure at the start was about 147 over 86.

Every day for 18 weeks, the volunteers were instructed to eat one-square portions of a 16-square Ritter Sport bar, or a similar portion of white chocolate. White chocolate doesn’t contain cocoa.

Systolic blood pressure, the top number, fell an average of nearly three points and diastolic dropped almost two points in the dark chocolate group, compared with no change in blood pressure readings in the white chocolate group.

Tests suggested that steady exposure to dark chocolate prompted chemical changes that helped dilate blood vessels and regulate blood pressure, the researchers said.

Participants were told not to eat other cocoa-containing products and to continue regular eating habits and activity levels. They also kept food diaries so researchers could see if other foods might have influenced the results.

But, said Taubert, “It is very unlikely that other factors may explain the blood pressure reduction.”

Dr. Lawrence Appel of Johns Hopkins School of Medicine said the most proven non-drug methods for lowering blood pressure are losing weight and eating less salt. Eating dark chocolate might help if combined with those two, he said.

For most people, “the lower your blood pressure, the better you are. So if you can get it lower from different strategies that’s good for the long term,” Appel said,

Michael Dinich a 1-year MDRT member to hold retirement workshops throughout the month of August in conjunction with MDRTs Retirement Preparedness week. MDRT is a leading non-profit association representing more than 35,000 of the best financial services professionals around the world.

Sayre, PA («www.prweb.com») July 26, 2007 — Although thousands of Baby Boomers throughout the Southern Tier of New York celebrate their 60th birthday each day, research shows that a vast majority are not financially prepared for retirement. To help local Baby Boomers better understand — and overcome — the unique financial challenges they face in retirement, financial expert Michael Dinich of Sayre is planning educational efforts as part of the Million Dollar Round Table (MDRT) Baby Boomer Retirement Preparedness Week, August 6-10, 2007.

MDRT is a leading non-profit association representing more than 35,000 of the best financial services professionals around the world. During Baby Boomer Retirement Preparedness Week, MDRT members are partnering with local media, governments, businesses and community groups to conduct educational activities and events. «www.estateandtaxadvisorygroup.com», a 1 year MDRT member is planning special retirement workshops throughout the Month of August, for specific dates and locations please call 1-800-729-1564.

«www.estateandtaxadvisorygroup.com»
Baby Boomers face financial challenges no previous generation has encountered, including pension terminations, skyrocketing healthcare costs, uncertainty about government programs such as Social Security, decreased personal savings rates and significantly increased life expectancy during retirement.

“To overcome their unique financial challenges, Boomers must take action on their own behalf to prepare for retirement,” said Michael. “It is never too late to take steps that will improve your financial future.”

MDRT Baby Boomer Retirement Preparedness Week
During Baby Boomer Retirement Preparedness Week, Michael Dinich and other MDRT members will be armed with information and tools presented at the recent MDRT Boomertirement Summit. At that event, Dr. Alan Greenspan (U.S. Federal Reserve Chairman - 1987-2006) and other financial experts, scholars, researchers and thought leaders came together for two days of discussion about solutions to the retirement challenges facing Baby Boomers.

MDRT has also established a Web site — «www.boomertirement.com» — that provides Baby Boomers with tools and information to help them take action in preparing for retirement. Content includes:

- Information about steps Boomers of various ages should be taking to prepare for retirement.
- A report that provides a summary of each Boomertirement Summit session, as well as links to video/audio of these sessions, audience handouts and other resources.
To get involved in Baby Boomer Retirement Preparedness Week, please contact Michael Dinich at 1-800-729-1564 or online at «www.MichaelDinich.com».

ABOUT MDRT AND BOOMERTIREMENT
MDRT is The Premier Association of Financial Professionals. Founded in 1927, MDRT is an international, independent association of more than 35,000, or less than 1 percent, of the worlds best life insurance and financial services professionals. With membership from 77 nations and territories, MDRT members demonstrate exceptional professional knowledge, strict ethical conduct and outstanding client service. MDRT membership is recognized internationally as the standard of sales excellence in the life insurance and financial services business.

Through Boomertirement, MDRT is providing leadership that will help the financial services industry provide solutions that will encourage the biggest generation in history — Baby Boomers — to take action to navigate the financial challenges they confront as they retire.

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