Property landlords

Property Landlords

The UK buy to let residential property market is evolving today!

Legislation changes

If you already own a portfolio of buy to let properties or are thinking of owning one, you may have come across the following recent tax legislation changes:

Unlike in the past when the finance cost gave 40% and 45% tax relief for higher rate tax payers, it will be restricted to the basic rate (20%) of income tax relief under the fully implemented section 24 legislation since April 2020.

This essentially means that you are not affected by the legislation changes if you are a basic rate UK tax payer. However, the new rules mean you could be pushed into the higher rate tax bracket by having more taxable income due to not being allowed to deduct mortgage interest costs. As a result, some sole trader or partner landlords can end up paying 20% additional tax on higher taxable residential rental income.

The impact of tax legislations changes will vary from case to case. The impact on rental profits, cash flow and net return on investments will depend on each individual’s personal circumstances. In worst case scenarios, a higher rate tax payer (40% or 45%) residential BTL landlord could be out of pocket due to reduced allowable tax relief of 20% on finance costs detailed above.

If you are a full/part-time BTL or an AirBnB Landlord, we can assist you with your statutory duties, accounts and tax compliance requirements, minimise your tax bill through possible incorporation and much more!

If you would like to avail of one or more of the above mentioned services, please get in touch with us via our online enquiry form or call us on 020 3713 8407

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