Buy to let tax planning

Whether you are a buy to let novice or a serial buy to let investor, it pays to seek tax advice.  However familiar you may be with procedures, the rules change all the time so it’s wise to keep up to date in order to maximise your profits.

L&C can not only help you find a cheap buy to let mortgage, but can introduce you to one of our selected partners, who will be able to tailor their wide range of advice to suit your unique circumstances.

It’s useful for you to know that as a buy to let investor you are subject to 3 different types of tax:

1) Income tax.  You will have to pay income tax on rental income that you receive from your property.  It is compulsory to do an annual self-assessment return.

2) Inheritance tax. The inheritance tax threshold is low at £300,000 from April 2007, so you will more than likely exceed it with your main residence alone, meaning a charge of 40% on investment property upon death.  Careful inheritance tax planning can really help avoid this.

3) Capital gains tax. When you sell a property, you pay capital gains tax on any growth in value – or profit that you have made, which can mean a 40% charge.  It’s crucial to structure your initial ownership of the buy to let property in the most cost effective way.

Our selected partners can offer you expert advice in general tax mitigation, capital gains planning, estate planning and trusts. 

Find out today to how you might be able to save significant amounts of potential tax through efficient planning. 

Useful links:
HM Revenue and Customs
Information on tax and national insurance.  Obtain information on tax credits, benefits etc
http://www.hmrc.gov.uk/

The Association of Residential Letting Agents (ARLA)
Information for landlords and tenants, including news, buy to let scheme, letting agent search etc
http://www.arla.co.uk/