Can someone shed some light on this?
QMY DAUGHTER lives in the top-floor flat of an Edwardian terrace property. There are dormer windows and a skylight in the roof, which we believe were in place when the 999-year leases were first drawn up back in the Nineties. Are these dormer windows and skylight a shared cost when it comes to doing repairs, which at least one dormer badly needs?
ALEASES vary and as there is no standard template, your daughter should check the terms of hers before she does anything about the work required.
The flat in which she has a leasehold interest will be referred to as the demised premises — the lease should define the extent of those premises and should also define the common parts of the building. The lease should also impose express repairing covenants on the leaseholder and landlord.
Look carefully at the description of the demised premises and at the leaseholder’s repairing covenants to see if the dormer windows and skylight are mentioned. Your daughter will be responsible for repairing the demised premises.
Generally a landlord is responsible for the repair of the fabric of the building which usually means the structure and exterior, including the roof and windows. If responsibility for the dormer windows and skylight is not covered specifically in the lease, examine the general repairing covenants in the lease to see if they assist with your query in any way.
Though the dormer windows and skylight presumably only serve your daughter’s flat they are still part of the fabric of the building, and so arguably are also the responsibility of the landlord. We regret that questions cannot be answered individually, but we will try to feature them here. Fiona McNulty is a solicitor specialising in residential property.
QI AM considering buying a house and then doing it up before selling it on. However, I am worried about all my profits vanishing into the taxman’s coffers. Will I end up paying less tax if I set up a company first and undertake my project as a business venture, rather than personally? Or, on the other hand, as a company would I have to pay additional stamp duty?
AIF YOU buy the house in your own name and it costs more than £125,000, then stamp duty will be payable, calculated on increasing portions of the property price over £125,000. In addition, if you already own a property an extra three per cent stamp duty will be payable on top of the normal stamp duty rates, subject to some exceptions.
On sale of the property, capital gains tax will be payable on any gain after deduction of any available annual exemptions that you may have, at the rate of 18 per cent to 28 per cent.
You are likely to incur costs in setting up a company. Stamp duty at three per cent above the normal rates for residential property will be payable by the company, and annual tax on enveloped dwellings may be payable if the price of the house is over £500,000.
On sale of the property, corporation tax will be due on any profit or gain, at the current rate of 19 per cent. There is also a potential for a double tax charge if you take money out of the company by way of a dividend or capital payment, as income tax may be chargeable and corporation tax should already have been paid.
WHAT’S YOUR PROBLEM? IF YOU have a question for Fiona McNulty, please email legalsolutions@ standard.co.uk or write to Legal Solutions, Homes & Property, London Evening Standard, 2 Derry Street, W8 5EE.