Although finance costs, predominantly loan interest, are now disallowed as an expense that can be utilised to reduce taxable rental income, these charges do qualify for a tax credit limited to 20% basic rate Income Tax. For example, if your loan/mortgage interest amounts to £10,000 this cannot be used to reduce your rental income. It will simply reduce your Income Tax bill by £2,000 (£10,000 x 20%).
 

The Rent a Room Scheme lets you earn up to a threshold of £7,500 per year tax-free from letting out furnished accommodation in your home. This is halved if you share the income with your partner or someone else.

There is no tax to pay on trading income or earnings from land and property as long as the income from each of these two sources does not exceed £1,000.

The government is introducing a ‘Register of Overseas Entities’ to crack down on foreign criminals using UK property to launder money.

Many investment properties are acquired through a limited company for a variety of reasons.
 
Complications arise when this structure is no longer appropriate, for example, there may be a desire to gift to a child, and extracting a property from a company back into private beneficial ownership can be a costly affair. Tax costs arise both for the company disposing of the property and for the purchasing connected party.

You may have seen recent headlines about the tax affairs of Airbnb in the UK and that HMRC have charged them with an additional £1.8 million of tax following an investigation. If you are a UK citizen, or a general fan of tax payments you may think that sounds good as the company didn’t seem to be paying enough tax. But how will this change affect Airbnb hosts? 

On Friday 19th June 2020, the government announced a planned extension to the Coronavirus Act measures to protect commercial tenants and a new code of practice for landlords and tenants. The expiry of the current restrictions (set out below) is to be extended from 30th June 2020 to 30th September 2020, giving business tenants further breathing space to negotiate with their landlord.

Measures were announced by the government on 23rd April 2020, designed to protect tenants of commercial property from aggressive rent collection, potentially pushing viable businesses into insolvency.

Measures were announced by the government on 23rd April 2020, designed to protect tenants of commercial property from aggressive rent collection, potentially pushing viable businesses into insolvency.

Although the Brexit process continues to throw a spanner into the normal workings of government, there are a few certainties from a tax point of view that will be effective from April 2020. A few property related changes are noted in this article:

If you rent out all or part of your home this may create a Capital Gains Tax (CGT) charge when you sell the property.

HMRC has a new £100m weapon to help identify individuals who may not be declaring all of their income and, therefore, paying too little tax.  

• You can claim Capital Gains Tax reliefs for traders (Business Asset Rollover Relief, Entrepreneurs’ Relief, relief for gifts of business assets and relief for loans to traders),

The 2019/20 tax year started on the 6th April and contains a number of changes which buy-to-let landlords should be aware of for the year ahead. 

Making Tax Digital has now been live for just over a month, affecting the way most VAT-registered businesses file their VAT returns. 

 

The expenses you claim against your property income will need to follow the usual HMRC ruling that the costs must be incurred wholly and exclusively for the purpose of renting out the property.

It is a commonly held point of view that when you sell your home you won’t pay any tax, and in particular, that you won’t pay any Capital Gains Tax on the difference between the purchase and sales prices.

It is a commonly held point of view that when you sell your home you won’t pay any tax, and in particular, that you won’t pay any Capital Gains Tax on the difference between the purchase and sales prices.

The gradual restriction of tax relief for buy-to-let mortgage interest has received much publicity since the process commenced 5 April 2017. From that date, tax relief is converted from a straight forward deduction against business profits into a basic rate tax deduction.

The gradual restriction of tax relief for buy-to-let mortgage interest has received much publicity since the process commenced 5 April 2017. From that date, tax relief is converted from a straight forward deduction against business profits into a basic rate tax deduction.

A new report published by the Intermediary Mortgage Lenders Association (IMLA) has revealed that net investment in buy to let property has fallen from £25 billion in 2015 to just £5 billion in 2017 due to excessive regulatory intervention on the sector. 

A new report published by the Intermediary Mortgage Lenders Association (IMLA) has revealed that net investment in buy to let property has fallen from £25 billion in 2015 to just £5 billion in 2017 due to excessive regulatory intervention on the sector. 

HMRC has published a list of popular misconceptions that taxpayers have about letting property. We have listed below a summary of situations where you will need to declare rental earnings to HMRC:

HMRC has published a list of popular misconceptions that taxpayers have about letting property. We have listed below a summary of situations where you will need to declare rental earnings to HMRC:

From 6 April 2017 (subject to the passage of the Autumn Finance Bill, when Parliament returns after the summer break), individuals will be able to claim up to £1,000 a year in tax-free allowances for property or trading income.  If you have both types of income, you may claim a £1,000 allowance for each.

 

From 6 April 2017 (subject to the passage of the Autumn Finance Bill, when Parliament returns after the summer break), individuals will be able to claim up to £1,000 a year in tax-free allowances for property or trading income.  If you have both types of income, you may claim a £1,000 allowance for each.

 

Home owners have seen the average value of their UK homes increase by over 40% and almost £60,000 over the past eight years since interest rates hit historic lows.

Home owners have seen the average value of their UK homes increase by over 40% and almost £60,000 over the past eight years since interest rates hit historic lows.

Property business owners, particularly buy-to-let landlords, have been hit with a number of quite dramatic changes in their tax status. One of the most draconian is the gradual disallowance of tax relief for finance payments that starts April 2017.

Property business owners, particularly buy-to-let landlords, have been hit with a number of quite dramatic changes in their tax status. One of the most draconian is the gradual disallowance of tax relief for finance payments that starts April 2017.

The buy-to-let property market continues to be affected by clampdowns backed by both the Government and Bank of England. This time, landlords are being warned of a major mortgage headache, when new rules come into play in 2017.

The buy-to-let property market continues to be affected by clampdowns backed by both the Government and Bank of England. This time, landlords are being warned of a major mortgage headache, when new rules come into play in 2017.

On 6 April 2016 the Government introduced a number of changes that have consequences for your personal finances.

Firstly, the tax-free personal allowance, the amount you are allowed to earn before income tax becomes payable increased to £11,000.

 

On 6 April 2016 the Government introduced a number of changes that have consequences for your personal finances.

Firstly, the tax-free personal allowance, the amount you are allowed to earn before income tax becomes payable increased to £11,000.

 

Buy-to-let landlords need to start considering their options, in particular, those who have borrowed heavily in order to build their property portfolio.
 

Buy-to-let landlords need to start considering their options, in particular, those who have borrowed heavily in order to build their property portfolio.