Energy Performance Certificates

When any commercial or residential building (subject to some minor exceptions) is to be sold or rented out, the Seller or Landlord must now provide any prospective Buyer or Tenant with a valid Energy Performance Certificate (“EPC”) free of charge at the earliest opportunity. This is defined as the earlier of when written information is supplied to the prospective Buyer or Tenant (for example with the sales or letting particulars) or when the Buyer or Tenant views the building. At the very latest the EPC must be provided prior to exchange of contracts. The transitional arrangements for commercial properties that have come onto the market before 1st October 2008, and to which specified circumstances apply, have now been extended to 4th January 2009. Where these arrangements apply, the duty to provide an EPC is deferred until exchange of contracts, following which the Seller or Landlord must commission an EPC as soon as reasonably practicable and must continue to use all reasonable efforts to obtain it.

For more information as to whether an EPC is required for your sale or letting, and if so when, contact Annabel Pullan of Gullands Solicitors.

Inside this issue:

Dividend Leapfrogging: Let Larkings help your cashflow needs
Planning your retirement: Rob Ayley gives some helpful guidance
Energy Performance Certificates: Gullands Solicitors help our businesses go green!

Wealth Creation Specialist - January 2009 Newsletter

Dividend Leapfrogging

Dividends are paid with a tax credit relieving liability at the basic rate of tax.

Any higher rate liability on dividends received in a tax year is due for payment on 31 January in the tax year and 31 July after the tax year end. This means that, initially, you pay tax on 31 January on the assumption that your income is the same as last year. If it is known to be less you can request postponement, but a miscalculation could give rise to an interest liability. Any increase in liability is paid on 31 January following the tax year end.

If rather than paying dividends regularly each year from your company you paid them so as to “bunch” them, paying every other year late so that it falls into the following tax year, considerable cashflow advantage on the payment of tax can be achieved.

This will amount to deferring the tax by 24 months in respect of 50% of the higher rate liability due and 18 months in respect of the remaining 50%, and 12 and 6 months in respect of the following year’s liability. You can then repeat this scenario every other year. No overall tax saving, but in these difficult days, cashflow is a matter of considerable importance. Let the Treasury help you out! We have a fee table that you can use to model your own dividend leapfrog plan. Email Robert to request this.

The contents of these articles represent the opinions of the authors, and not of Professional Solutions Group Ltd. Neither Professional Solutions Group Ltd nor Tenet Connect Ltd. are responsible for the accuracy of the content of the articles. These articles do not constitute a recommendation to purchase any of the products mentioned.

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Planning your Retirement

Here we are in 2009 and it seems only yesterday we were ushering in the new millennium! I guess the rapid passing of time has a message for us all and that is we must plan for retirement. How you view this event will very much depend on your planning:
1. It might be something you would prefer not to think about.
2. It could be a day when you can choose to take it a little easier and have more holidays.

I am often asked if saving for retirement is really worth it and my answer is as follows:
“There are four elements to retirement saving and I list these in order of importance:
1. How much you save
2. How long you save it for
3. What the rate of return is
4. How much tax gets paid

The last 3 are irrelevant if you do little or nothing for yourself.” The final one indicates my preference for ISA’s where Basic Rate Taxpayers are concerned leaving pensions for 40% tax payers who stand a good chance of not paying the tax relief back at the same rate they received it i.e. have tax deducted at the Basic Rate because of lower income in retirement.

Further, right now investing a lump sum could deliver three benefits:
1. A reduction in your tax bill
2. The opportunity to invest in stock markets which are far lower than a year ago
3. The ability to effectively back fund missed years as the limits for funding offer scope for much larger contributions than before the recent pension reforms

Needless, to say it is crucial you receive proper advice in relation to the above and I am here to help. Just email me or pick up the phone for a discussion.
The value of investments and income from them may go down. You may not get back the original amount invested.