Tuesday, 30 July 2013

I own land! Give me money!

Spotted by Thomas B Hall in The Telegraph:

The HHA [Historic Housing Association] is... fiercely opposing new restrictions on stately homeowners offsetting losses against other more profitable parts of the business, which were imposed by the Treasury in April. The cap limits the exceptional losses that owners can offset against other income at £50,000.

The HHA says it is “threatening our ability” to safeguard centuries of heritage, and making an “already serious situation much worse”. Deep in the bowels of Tissington Hall, Sir Richard taps a decaying green-furred heating pipe situated near a collection of leather gun cases and furrows his brow.

“The HHA survey suggests what I’ve been saying for a long time: we are privileged to live in these places, but if we, as a nation, want to continue to have them, we have got to be helped along the way somehow.

“When you come here, everything looks fine and in good order. But the trouble is behind the scenes, where people don’t see. I always tell visitors I would swap my bank balance for theirs any day of the week. Some of them get it, some of them don’t.”

Tissington Hall has 61 rooms, 48 chimneys, seven staircases, seven bathrooms, six dogs and two cats. Sir Richard reels this off with the weary air of a man who has to entertain 1,800 visitors a year. The 2,000-acre estate also hosts 21 weddings annually to supplement his rent from the 50 properties in the village that he owns. He estimates the annual income at around £500,000 a year.

“But it goes pretty quickly,” Sir Richard says, citing bank repayments, staff (six full‑time), maintenance of all the properties, and tax. “With the estate we are doing fine. With the hall we are making a loss...

“One of the things about living here,” he says, “is that I’m an exhibit, too. I share my life with thousands of people every year. When you inherit something, you move your life and your family, but you just want to keep it going.

“I’ve never qualified in anything, my job is running a stately home. Nobody can qualify you for that. It’s just part of life. And I love it.

"We’re not asking for any more money from the government or any more grants. We’re just asking them not to change the rules.”


I, as a nation, couldn't give a stuff. Nobody else gets tax relief for maintenance on his own home, why should he?

16 comments:

Lola said...

I, as a nation, couldn't give a stuff. Nobody else gets tax relief for maintenance on his own home, why should he? Agreed. But what he's saying is that it's not just where he lives. It's his business. Now, as you know, I totally agin all sorts of special deals, but if the house becomes an hotel (say) it does get tax relief for maintenance and repair. The problem is not the absence or otherwise of tax relief, it's the way we tax land, labour and capital. Personally I reckon his bleating is a great argument for LVT.

Mark Wadsworth said...

L, yes, to the extent that the house is used for "a business", you can claim a pro rata share of expenses, that's fair enough.

But the restriction on loss relief is not an absolute restriction, it merely says that he cannot offset "house losses" against rental income, but he can still carry forward the expenses and offset them against "house income" in future years.

So in the long run, he gets his tax relief - assuming that the "house" generates a net profit overall.

And I don't think his ilk would take kindly to LVT, either :-)

Bayard said...

In my experience, everyone who lives in a stately home, lives in two rooms plus bedrooms and leaves the rest to the cold and the visitors, so all Sir Richard needs to do is make himself a cosy maisonette in one wing and then he won't be trying to get "tax relief for maintenance on his own home", he will be getting tax relief on his business, which is, essentially, running a museum.

Lola said...

MW. yes, of course, I am aware of the proportionate tax relief bit (less so than you, obviously).

LVT would stop all this arguing, dead. And since his house is a wreck, surely its 'rental value' would be low and he'd save money anyway. I mean, it's just daft to have all this pointless debate and waste of time and effort when by a very simple change you can just be left alone to get bloody on with it and succeed or fail accoring to your skill / luck.

And if the 'country' felt that his house was worth preserving, well we can have that debate.

Or am I missing something?

Mark Wadsworth said...

B, yes, he is running private museum at a loss. You don't get tax relief for businesses not run with a serious intention of making a profit.

L, yes, if we assume that the house is listed and may not be demolished and rebuilt in any way, the rental value of that quarter of an acre on which it sits is probably nil.

But the rental value of a site with permission for a big house in a nice area in the countryside can be sky high, hundreds of thousands a year (depending on exactly where it is).

So if the council doesn't want any LVT from him, they leave the house listed. And if they want LVT money off him, they give him permission to knock it down and start again with something that looks vaguely similar (but is cunningly divided up into flats or maisonettes etc).

formertory said...

If he's running a business and trying to win custom, a "weary air" and one which has him "reeling off" figures to the 1800 visitors "he has to entertain" isn't likely to be a winning trait. If that's really the way he acts, why would anyone pay to be taken round a crumbling pile by someone who at whatever level broadcasts resentment?

If indeed his job is running a stately home, he sounds as though he needs a swift kick in the pants, and some personal development objectives putting in place.

Lola said...

FT - Quite. I thought that too.

Bayard said...

"If indeed his job is running a stately home, he sounds as though he needs a swift kick in the pants,"

Or, simply get someone a bit more enthusiastic to do it. It sounds as if he isn't really trying very hard.

"and start again with something that looks vaguely similar (but is cunningly divided up into flats or maisonettes etc)"

He wouldn't need to even do that. There are plenty of stately homes that have been "Martinised" or divided up in this way without affecting their outward appearance and with little effect on their inward appearance either. Most statelies consist of a few grand rooms that were always meant for public show and are usually all that the public gets to see even today and a whole lot of smaller, undistinguished rooms that are ideal for converting into flats or maisonettes.

Mark Wadsworth said...

FT, good point.

Anyway, 1,800 visitors is never going to cover his costs, even if they pay £20 each (why would they?) that would barely cover one person selling tickets and showing them round and cleaning the toilets etc, let alone the repairs and insurance.

B, sure, physically it is probably possible but depending on what sort of listing and restrictions it has, maybe it is simply not allowed. Which is a shame.

Bayard said...

"Anyway, 1,800 visitors is never going to cover his costs"

From Wikipedia: "The Hall is open to the public at specified times of the year and is available for commercial and private functions." which suggests to me that he has been in receipt of public money for repairs in return for "public access", which he is keeping to a minimum and for which he may not be allowed to charge, so the 1800 visitors may be a bit of a red herring.

Tissington Hall is Grade II* listed, so alterations are quite possible if they do not affect the character of the building. The main problem would be additional staircases. Listing isn't as inflexible as people think, it all depends on the quality of the local conservation officer.

Bob E said...

Sir Richard has voiced his concerns before: (http://www.theguardian.com/artanddesign/2008/jul/08/heritage.britishidentity)


'If I didn't have this house to look after, then I'd be well off'

Tissington Hall has been in the possession of Sir Richard Fitzherbert's family for 400 years. When he inherited it, he cried - how was he going to make ends meet? Like many stately home owners, he sees himself as a custodian of our historic heritage and believes he should be rewarded with bigger tax breaks.

So why doesn't he just sell up? Sir Richard, who recalls "sitting down and crying" at the enormity of the responsibility before him when he inherited the house at the age of 24, looks aghast. "You have an obligation," he says.

"If your family has been living here for five centuries, believe me, you really, really don't want to be the one that gives up on it all. It's obviously an enormous privilege living somewhere like this, but if you took more than a cursory look at the balance sheet, you'd run a mile."

The Guardian, Tuesday 8 July 2008

Bob E said...

Apologies, hit post too quickly, as I also intended to flag up this interesting and heart warming read (http://www.thisisderbyshire.co.uk/Fiona-swaps-big-city-life-country-love-conquers/story-15812810-detail/story.html)

Mark Wadsworth said...

B, you're the expert on this listing and planning stuff, maybe he could or should convert it into flats.

But I am the expert at tax. The phrase "open to the public at specified times of the year" is code for "He wriggled out of paying inheritance tax using the loophole for 'publicly accessible buildings and works or art'".

You don't get public money for this, but it is in your interests to make the place as uninviting for the public as possible, in which he seems to be doing a good job. Other tricks include only opening during the week from 9 until 10 in the morning unless it's a Bank Holiday etc.

BobE, one's heart bleeds, doesn't it?

Kj said...

There's always the National Trust, where people actually donate money voluntarily to maintain old buildings, sometimes even while their owners still live in them.

Mark Wadsworth said...

Kj, exactly.

I personally do not like these old castles and mansions, they are symbols of feudal oppression. But other people do, so fair enough, let those other people pay for them.

Kj said...

MW: symbolic schmymbolic, however they were paid for, rents, slave-labour, they are well crafted follies, that look nice, and usually have very nice parks. All in all, visiting one of these places is, for many people, a good way to spend a sunday to watch something else than the dull buildings we surround ourselves with every day. But agreed, let those who value them pay for them :)