2015 Finance Bill Receives Royal AssentMake Text Bigger
18th November 2015 may well be marked in history as the beginning of the end for most private buy-to-let landlords.
Restrictions on the amount of financing costs which can be deducted by individuals, partnerships, trusts and personal representatives when calculating their income from a property business are included in the Act (s 24). The amount of mortgage interest or similar which can be deducted is restricted to 75% in 2017/18, then 50% in 2018/19, 25% in 2019/20 and to nil from 2020/21 onwards. Individuals will receive a basic rate tax reduction in respect of financing costs which cannot be deducted as a result of these measures. A committee stage amendment to s 24 ensures that companies chargeable to income tax are not subject to these restrictions (because companies generally are outside these provisions), and to enable trustees to claim the basic rate tax reduction in certain circumstances. A report stage amendment then clarifies that relief for interest on a loan to invest in a partnership is restricted where the partnership uses that investment for carrying on a UK or overseas property business that consists of residential property.
Looking into selling?
Have you have decided to sell some or all of your property portfolio to repay debt? If so we can help you to avoid estate agents commission, get maximum advertising exposure of your property(ies) on the major property portals including Rightmove, Zoopla and Property118 and offer plenty of advice on how best to preserve your rental cashflow during the sales period. We will even organise a FREE valuation and marketing appraisal for you. For more details please click here.
Tax Avoidance Advice
Only wealthy landlords will be in a position to take advice and implement the business restructuring necessary to avoid the implications of these tax changes. Fortunately, there are a lot more opportunities for tax planning than we thought there were going to be only a week ago.
As Property118 readers will be aware, we operate a tax planning consultancy service which includes barristers, solicitors and chartered accountants who specialise in property taxation. Over 300 Property118 readers have expressed an interest in this service in the last few weeks. If you are one of those people, please rest assured that we will get around to contacting you in due course. Naturally, we must prioritise our existing Consultancy clients first.
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