20 September 2018
Landlords and tax: are you up to date?
Following on the heels of the changes surrounding buy-to-let mortgages for landlords who own four or more homes in 2017, this year saw a new raft of tax rules. Are you up to date with the latest?
Tax rules around owning multiple properties can be complex – not to mention ever-changing, but our experienced property tax team can help you understand what you need to know, so that you can concentrate on your property portfolio and make the most of your tax allowances.
Which tax bracket will you be in?
The first thing you need to know is that the ability of landlords to offset mortgage interest payments against rental income is being phased out by the government. In 2017 it was reduced to 75 per cent. For the 2018-19 tax year this is being further lowered to 50 per cent. This could affect landlords who find themselves in the higher rate tax bracket, so it's best to seek advice now rather than waiting until you submit your tax return.
Bear in mind too that the phased approach is likely to knock many landlords into the higher-rate taxpayer bracket. Checking where you stand now could avoid any nasty shocks when sorting out your tax return.
Despite there having been an increase in the Capital Gains Tax allowance to £11,700 for 2018-19, landlords are minded to be aware that there are higher Capital Gains Tax rates on profits above that allowance for buy-to-let investors or those with a second home.
This higher rate for selling your second property is 18 per cent for basic-rate taxpayers and 28 per cent for those in a higher tax bracket.
Perplexed about property tax?
If you are unsure about your property tax obligations or what you can claim back as a landlord, contact our property team on 0115 964 88666 or email email@example.com today for support.
The views provided in this article are for general information purposes only. Nothing in this article represents advice of any nature whatsoever. Accordingly, RWB CA Limited does not accept any liability or responsibility for the information contained in this article or any decision or other action that may be taken in reliance upon the information contained within it. RWB CA Limited accepts no responsibility for any errors of fact or opinion and assumes no obligation to provide you with any changes to its assumptions.