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Saturday, October 22, 2016

Tax hike to affect half a million landlords

Landlord tax hike

The tax hike or raid instigated by the government changing the way they work out a landlords rental profit leading to massive tax rises for some landlords could affect up to 440,000 landlords according to claims by the National Landlords Association.

Proposed tax changes will push landlords into higher tax bracket

The changes resulting in the loss of mortgage interest tax relief which are to be staggered will no longer allow higher rate tax payers to offset all their mortgage interest charges against their rental income.  As a result over a fifth of landlords claim that they will be pushed into the higher tax band triggering a higher rate of tax and an increased tax bill for many landlords.  Some landlords have been investigating using a company structure to reduce their tax bill.  This works because a landlord operating through a company will continue to be able to offset their entire mortgage interest bill.  We have explored previously whether landlords should incorporate their rental business.

Law society of landlord tax change

The way that the government has brought in the legislative changes to the landlord tax system on income tax has been criticized by a number of organizations.  The law society has actually slammed the way the finance bill has been introduced.  Despite these criticisms it is very unlikely that the government will back down.  In fact Cherie Booth ( Blair )representing a group action by landlords recently lost their case challenging buy-to-let tax changes.

More tax info:

5 ways to slash your tax
Calculate your tax return with our free online property manager
Capital gains tax explained

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