October 2023 Newsletter | Cylchlythyr Misol Hydref 2023
- The Bank of England has held its base interest rate at 5.25% after 14 consecutive increases. The decision to hold rates was triggered by a surprise drop in inflation. There are hopes that mortgage rates will recede over coming months and for savers, ensure you research thoroughly to find the best savings rates whilst interest rates remain high.
- For self-employed individuals who are looking to re-mortgage, 6 October is a key date to remember. Lenders often ask that any tax calculation is no older than 18 months, therefore if you are looking to re-mortgage and were hoping that your 2021-2022 tax information was sufficient, you may find lenders asking for your 2022-2023 tax information, despite the tax filing deadline for 2022-2023 being 31 January 2024.
If you have not yet filed your 2022-2023 tax return and are looking to re-mortgage imminently, we suggest you file your tax return sooner rather than later.
- HMRC compliance teams have increased their activity in recent weeks, having had reduced capacity during the Covid-19 lockdown periods. Please be aware that HMRC have the means to discover when an individual has undeclared income. For example, individuals have recently received letters stating that HMRC believe they are in receipt of income from letting property. If you have any undeclared income, proactive engagement with HMRC can help to minimise any penalty charges.
- We have reported in previous newsletters the Government's proposals to reduce the minimum EPC rating for rental properties from E to C from 2025 onwards. Prime Minister, Rishi Sunak, has now scrapped the proposed legislation. This announcement was made alongside a number of other announcements, including a delay to the ban on the sale of new petrol & diesel cars from 2030 to 2035.
- If you have a very old email provider, consider updating now to Gmail or Apple (other providers are available). One client recently lost all access to their old email account and they are unable to check any old correspondence.
Ask Huw & Aled: my elderly widowed mother is contemplating selling her house, which has become too big for her to manage, and moving into a retirement flat. She is a fan of the Richard Osman novels and is looking forward to living in a community of similarly aged people. What financial matters need to be considered?
There are life advantages for many older people from relocating to a retirement flat, including not having to maintain a large property and having access to communal areas and other amenities depending on the retirement complex.
There will be a regular monthly “service charge” to cover communal costs and the amenities provided, often £500 - £800 per month. In a few years’ time when she is no longer able to live in the flat, her family may well find that the property may have to be sold at a substantial loss, as has happened to many families in recent years. An alternative may be to consider renting the retirement property. The monthly cost will be higher but there is no risk of a large capital loss at the end of her living at the property.
