Are you aware that there is a fundamental change in the way your tax will be calculated in the future?
George Osbornes planned reforms could mean that a typical landlord who historically had no tax to pay on property letting profits will be left with annual taxation liabilities running into £000’s.
Previously landlords were able to claim allowable interest relief on their buy-to-let mortgages which left them with no profits, or in many cases losses, which they were able to use in future years.
The proposal now is that the interest will no longer be deductible from the profits and that only a proportion of the interest, at your current tax rate, will be available as a tax deduction in your tax return. This will result in landlords who traditionally had little or no tax to pay on their property income being left with ongoing tax liabilities.
What steps should landlords be taking now?
There are a number of actions landlords could take to avoid the additional tax burden
- Transfer the properties into a company
- Sell the properties
Are there any further implications landlords should be aware or?
- Non compliance could leave you with penalties and cashflow issues
If you would like to discuss any of the above further, please contact us.