Landlord Taxes Interview with Accountant

All of us at My City Nest hope you enjoyed a fantastic Christmas and on behalf of all the team here, I’d like to wish you and your family a very Happy New Year. 2017 was another hectic one for the property industry. We saw the abolishment of stamp duty for certain first-time buyers as well as the start of the controversial phasing out of buy-to-let mortgage interest tax relief.

Maintenance And Repairs
Up to last year 2017, the wear and tear allowance allowed landlords to claim back a percentage of the annual rent. The new allowance will allow for residential landlords to deduct only the actual costs incurred of replacing furnishings in the tax year. No more grey areas with wear and tear.

Mortgage Interest
Before April 2017 the full amount of mortgage interest payments could be offset residential landlords tax return . We are now in a transition period over the next 4 years whereby it will go from 75%, 50%, 25% to no relief at all for the 40% tax payers.

Advantages of limited companies for Landlords
Tax efficiency
Mortgage interest can be offset

Disadvantages limited companies for Landlords
Capital gain tax when transferring from individual to the limited company
Your details are public including any profits and loss

Capital Gain Tax
Selling your property you will pay tax on the gain . Currently capital gain tax for residential is set at 18% or 28%.

With the industry rapidly changing for landlords, this can be a confusing time. Which is why I will be teaming up with some sector experts to help you understand recent changes in taxes and much more. We will be hosting a seminar and networking event for landlords to help explain what has happened and what you need to consider. Please contact us for further details on the event to take place in March 2018.