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Glossary - T
Taxation of Property Income – Profits earned from UK land or property through lettings are treated as arising from a business. They are computed using the same principles as for trades but the taxpayer is not actually treated as if they are trading – earning are treated as unearned income. Thus, you can off-set losses against other rental income, but not against earned income, nor can you use the income for pension contributions or get CGT reliefs as a trader.
Tenancies (Residential) – A tenancy is an “estate in Land” – a right to occupy for a period in exchange for rent. The tenant must have exclusive possession of the land for a tenancy to exist. There are 4 main types of residential tenancy in England & Wales: (1) A Protected (Rent Act) Tenancy 1977 (2) Protected Shorthold Tenancy – Housing Act 1980 (3) Assured Tenancy (AT) – Housing Act 1988 (4) Assured Shorthold Tenancy (AST) – Housing Act 1988 & 1996
Tenancy at Will – A tenancy at will gives landlord and tenant some flexibility in the tenancy – it is similar to a licence and sometimes it is difficult to tell the difference. A Tenancy at will is usually an interim tenancy used during period of negotiation of a new lease allowing either party to terminate at any time.
Tenancy Deposit Scheme – From 6 April 2007, all deposits taken by landlords for an Assured Shorthold Tenancies in England and Wales (the vast majority of tenancies), must be protected by a tenancy deposit protection scheme. From this date, tenants can ask their landlord or his agent about the details of the scheme when signing a new tenancy agreement.
Tenant’s Improvements – The customized changes a tenant makes to their property with prior consent from the landlord, in order to configure the space for the needs of that particular tenant. These include changes to walls, floors, ceilings, and lighting.
Tenants in Common – A alternative to joint tenants, as tenants in common allows owners to have different shares of the same property. If an owner dies, the share is passed on the owner’s heirs.
Tenant’s Notice to Quit – To end a tenancy, tenants must give notice. The fixed term notice should be as prescribed in the tenancy agreement – usually one month when the rent is paid monthly. Where the tenancy is periodic, the notice must be in writing, must be for one full tenancy period, and must end on the last or first day of a tenancy period. Usually, rent is paid monthly, so the notice is one month, but for weekly tenancies the notice must be for a minimum of 28 days.
Tenant’s Representative – A person selected by the tenant to represent them in negotiations or dispute resolutions such as Arbitration, Independent Expert or Court proceedings.
Tenure – The state on which a property is held, either leasehold or freehold.
Terraced – A property where both sides of the wall are shared with adjoining properties.
Tort – a wrongful act or omission for which someone can be sued for damages in a civil court. It includes negligence, nuisance, libel, trespass or injury done to someone (whether intentionally or by negligence), and inducement to break a contract (although breach of contract itself is not a tort). Tort is distinguished from a crime in that it affects the interests of an individual rather than of society at large, but some crimes can also be torts, for example assault.
Tracker Mortgage – A mortgage with a basic interest rate that changes against the Bank of England base rate.
Transfer of a Going Concern (TOGC) – A transfer of a business as a going concern (TOGC) is the sale of a business including assets which must be treated as a matter of law, as ‘neither a supply of goods nor a supply of services’ by virtue of meeting certain conditions. Where the sale meets the conditions the supply is outside the scope of VAT and therefore VAT is not chargeable.
Transition Arrangements – Rateable values may change between each five-yearly revaluation. Transitional arrangements phase in the effects of these changes by limiting increases in bills year on year. Under the transition scheme, limits continue to apply to yearly increases and decreases until the full amount is due (rateable value times the appropriate rating multiplier).
Triple Net Income – This is an American property term equivalent to “Full Repairing and Insuring Lease” (FRI) in English terminology. It is a lease agreement that makes the lessee (the tenant) solely responsible for all of the costs relating to the asset: real estate taxes, net building insurance and net cost of any maintenance or repairs during the term or at termination of the lease. This type of lease can be referred to in the US as a “net-net-net lease” or a “hell or high water lease”.
Turnover Rent – A rent which is calculated as a proportion of the annual turnover of the landlord business.