Should I buy a third buy to let?
I currently have 2 buy to let flats in Reading. Each brings in £9800 per annum. I have a total of £125000 mortgage lending on these and they have a value of £410000. I work earning £21,900 and have a pension of £18800. My wife earns £10300.
I am considering buying another flat in Newbury for £190,000. It has tenants paying £925 a month. I am thinking of increasing my current mortgages to £165,000 and using savings with a new mortgage of £130,000 to do this.
I am aware the rules are changing although do not fully understand them all.
I am looking for peoples’ thoughts on this, any advice would be welcome as to problems/costs etc
Thank you
Peter
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Residential revolutions and robots
Member Since February 2015 - Comments: 10
8:15 AM, 24th March 2018, About 8 years ago
Reply to the comment left by Michael Barnes at 23/03/2018 – 19:42
Do you have any sources to verify this, or is it a hunch?
Member Since July 2013 - Comments: 1434
6:11 PM, 24th March 2018, About 8 years ago
Reply to the comment left by John Hart at 24/03/2018 – 08:15
I wrote it based on memory, but try https://www.gov.uk/government/collections/small-company-taxation and associated links.
Member Since July 2013 - Comments: 1434
7:48 PM, 24th March 2018, About 8 years ago
Reply to the comment left by Michael Barnes at 24/03/2018 – 18:11The final report (https://www.gov.uk/government/publications/ots-final-report-on-lookthrough-taxation) indicates that look through is not justified on simplification grounds but does not discount it on policy grounds.
The letter at https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/571264/FST_letter_to_OTS_Final.pdf, linked from https://www.gov.uk/government/publications/correspondence-between-the-chancellor-financial-secretary-to-the-treasury-and-the-office-of-tax-simplification-regarding-recent-ots-publications includes the following :
Your look-through paper exposes some of the key issues and opportunities associated with taxing some businesses in this way. I welcome your conclusion that there is merit in a long-term, strategic review in this area of taxation. The ways in which people are working are changing, including a growth in selfemployment and the number of single person companies. The OBR has highlighted that the growth in incorporations is resulting in increased fiscal costs to the Exchequer. The tax system needs to keep pace with these changes and so as the Chancellor has said today, the government will look at how it can ensure that the taxation of different ways of working and different forms of employee remuneration is fair and sustainable. I am confident that your findings will help ensure further work in this area gives appropriate consideration to simplification.
Also the letter from the Chancellor at https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/571265/OTS_NICS_CX__letter.pdf includes:
7. There are also wider issues with the different tax treatment of different forms of labour, highlighted by the growth in self-employment and the number of single person
incorporations. This not only causes complexity but also – as the OBR has highlighted (in relation to the growth in incorporations) – is resulting in increased fiscal costs to the
Exchequer. The Government will therefore also look at how it can ensure that the taxation of different ways of working and different forms of employee remuneration is fair, sustainable
and efficient.
I originally heard about it on radio 4, where it was described as wanting to tax small companies in the same way as sole traders.