Question: I have been considering purchasing a second property in Belfast to rent out to students. However, I have read recently that it may no longer be possible to use properties for this purpose in Belfast. What do I need to know?
Maria O'Loan, an associate in planning and environmental law with solicitors Cleaver Fulton & Rankin replies:
The Planning (Use Classes) Order (NI) 2004 includes Houses in Multiple Occupation (HMO) as a “sui generis” (unique) use. This means that a change of use to an HMO always requires planning permission.
The statutory definition of a house in multiple occupation is a house occupied by more than two people who are not all members of the same family. This would include a house occupied by more than two students.
Therefore if you were to purchase a house for rental as student accommodation, planning permission would be required for the change of use.
However if the property in question has been used for a continuous period of at least ten years as an HMO you will not require planning permission but should apply to the Planning Service for a Certificate of Lawfulness of the existing use. The Planning Service has published a development plan for HMOs in the Belfast area. Under this plan the Department for the Environment has indentified 22 areas in Belfast where HMOs are concentrated.
Within these designated areas, which include the Holy Land and Stranmillis areas, planning permission will only be granted where the number of HMO dwelling units does not exceed 30% of all dwelling units within the area.
However the department has also identified areas, including Ann Street and the Dublin Road, where planning permission for HMOs will be granted.
It is therefore important to carefully consider the location of your rental property as this will be crucial in determining your application for planning permission for use of the property as an HMO. The Northern Ireland Housing Executive also operates a statutory registration scheme for HMOs. A registered HMO is required to comply with all HMO standards, must be fit for human habitation and must be managed in accordance with the HMO Management Regulations.
These requirements can be onerous and you should contact the Housing Executive to ascertain what works to the property may be required.
Question: I have recently set up a business but have no sales and marketing skills. Where can I learn the basics?
Rowan Geddes, from Invest NI’s Trade Development Services Division, replies:
There are several excellent sales and marketing guides on the nibusiness|info.co.uk website. These give practical advice on everything from creating a marketing strategy to managing customer care. The starting point for sales and marketing is to get to know your customers and your competitors. To do this you need to carry out market research.
This can involve reading published market reports as well as doing your own research. Invest NI’s Business Information Centre has a wealth of market information at (028) 9069 8135.
Writing a marketing plan is essential as this will be your blueprint, setting out whom you are targeting, how you will do it, your budget, timescales and so on. It will also give you objectives against which to measure your progress.
Marketing is about raising awareness of your product and your company: sales is about closing the deal. Your sales methods may include face to face selling, telemarketing or email marketing. Whatever method you use a key point is to sell the benefits rather than the features of your product or service.
There is a lot of good advice on techniques for closing a deal in the ‘selling’ section of nibusinessinfo.co.uk.
Ongoing sales depend also on good customer care to ensure that your customers come back again and again.
If you are ready to sell your product or service outside Northern Ireland you could benefit from Invest NI’s Export Skills and Knowledge Workshops.
Question: I’m a business owner and with the end of the tax year coming up, what tax planning should I consider?
Claire Geddis, partner with S Hill & Co, investment advisers, replies:
In the current economic environment, it is more important than ever to make the most of tax free allowances and exemptions.
If your company’s year end finishes on March 31, it is an necessity that you should have paid any pension contributions by that date.
Anything paid later will fall against the company profits assessable in the following year.
Pensions are extremely efficient as higher rate tax payers can claim 40% tax relief.
There are other investments that could also be considered for tax relief such as Enterprise Investment Schemes and Venture Capital Trusts.
From a savings point of view, always try to make the most of your annual ISA allowance as ISAs are extremely tax efficient and flexible.
A cash account ISA is limited to £3,600 per annum however an investment ISA can have up to £7,200 (less any cash ISA funds) placed in it.
If you have a spouse you could consider giving them the funds to do an ISA too.
Similarly, higher rate tax payers should analyse their assets and income streams particularly if their spouse is a lower rate tax payer.
Where possible gift the ownership over to the lower tax payer.
Any growth on shares or unit trusts is subject to capital gains tax.
Everyone can make gains of £9,600 per annum before capital gains tax is payable.
As this cannot be carried over, I would recommend that gains are staggered to make the most of this.
Also inheritance tax should not be overlooked, everyone has an annual allowance of £3,000 that can be given away and is exempt from IHT.