22:31 PM, 26th October 2022, About A year ago 26
There seems to be little doubt that interest rates will only be heading upward in the next few years. If you disagree with this please share your thoughts with me.
So, I’ve been running some numbers and scared myself half to death. If interest rates go up another 2% I will not be making any profits from my rentals at all.
Put your rents up I hear you cry.
Well, that may or may not be an option. As far as I know, my tenants don’t have magic money trees in their (or should I say my) gardens either!
Get a job I hear you say. Well, I’m 73 years old and disabled, so that might not be too realistic either.
So what options do I have left?
Sell up? Well, maybe, but the Capital Gains Tax would be horrendous and where am I going to find buyers with mortgage rates at this level? Are first-time-buyers going to buy at a point we are about to enter a worldwide recession and mortgage rates have risen sharply and are set to rise further?
I do have some savings, but they will only tide me over for a year or so, two years at best. I’m hoping to live a lot longer than that!
But it gets worse!
Not only will I be making no money but HMRC will not see it that way.
How come you might well ask.
Well as I understand it, HMRC do not allow me to treat my finance costs as an expense. In their eyes, I am still making a profit and they are going to expect me to carry on paying tax even though I have no money.
How is that going to work?
I’m OK for now but I am predicting a financial armageddon scenario within the next year or two.
Any ideas clever people?
There are hundreds of thousands of landlords asking themselves the same questions right now. They don’t know which way to turn either.
Thankfully, you’ve come to the right place. We specialise in solving problems just like yours. We don’t have a magic cure-all pill, we certainly cannot control interest rates for example, but there may well be ways we can help you to solve your tax problems. Our founder (Mark Alexander) recently wrote an article on this very subject. If you missed it you can read it via this link.
Your age might be a blessing in disguise because there is at least one mortgage lender offering ‘later life’, lifetime buy-to-let refinancing that allows interest to be rolled up as opposed to interest being serviced monthly. That might be the saviour you’re looking for to solve your cash flow issues.
The starting point is for you to book a Landlordlord Tax Planning Consultation using the form below.
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