Taxation of Buy To Lets

by Alexander Beard, on Apr 24, 2018 9:32:18 AM

As you may be aware new tax rules are being phased in in regard to the taxation of Buy To Let Properties over the next few years. These changes will effect Landlords who have Mortgages on their rental properties and whose combined income including that of their BTL rental income, takes them above the 40% tax threshold. For some this could be a considerable change and make their portfolios generate far less income than they have been used to. This could be of greater concern to people who rely on this income in retirement or intend to expand their portfolio of properties for this purpose.

Buy to let landlords have a requirement to report their UK rental income and allowable expenses via their self-assessment tax return, which is due annually by 31 January following the end of the tax year. E.g. 31 January 2019 for the 2017/18 tax year. This applies to landlords who are resident and non-resident in the UK.

Should you be a landlord with several UK rental properties it may be worthwhile considering the benefits of managing the rental via a limited company. There may be considerable cost implication of doing this with existing properties in terms of both Capital Gains Tax and Stamp Duty.  If you require assistance with the completion of your self-assessment tax return, have any general queries regarding the tax implications of your rental property or would like to discuss the possibility of setting up your own limited company you should take prior advice from your accountant as this is specific individual tax advice.

Once you have discussed with your accountant whether to own the properties via a Ltd company or personally, Alexander Beard Investment Management Ltd can give you expert advice around the choice of lender and rate which will be best applicable to your personal circumstances.

Your property may be repossessed if you do not keep up repayments on your mortgage(s).

The Financial Conduct Authority does not regulate some forms of buy to let.

Our initial charges are usually £495 and we may also receive a fee from the lender; the precise amount will depend on your circumstances.

Mike Shakespeare