Buy-to-Let

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Accountants Christine and Fran having meeting in Brackley office

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Buy to Let Tax Advice FAQs

Buy to let tax advice is advice on how to manage your tax liability as a landlord. This may include advice on tax deductions and allowances, tax planning strategies, and compliance with tax laws and regulations.
Buy to let income is subject to income tax, just like any other income. Your tax liability will depend on your total income and your tax bracket.
There are several tax deductions available for buy to let expenses, such as mortgage interest, property repairs and maintenance, and insurance premiums. It's important to keep detailed records of your expenses to claim these deductions.
Buying a property through a company can have tax implications, such as the need to pay corporation tax on rental income. It's important to consult a tax advisor to understand the specific implications for your situation, which is where Connolly Accountants & Business Advisors can come in.Contact our team of experts today to discuss our Buy to Let Tax advice in some more detail.

Buy to Let Tax Advice

Our services for property investors, commercial and residential landlords & developers are designed to protect profits, grow investments and minimise tax liability.

You may decide to become a landlord when you inherit a house, or when you move and let your former home. Where a let property is held in the joint names of a married couple or civil partners, it can provide a useful income stream for the spouse or civil partner who has little or no other income. Some people hold property to provide an alternative fund for retirement and let it in the meantime.

Whatever your venture, there are a range of taxation issues which will need to be addressed from the outset, as well as a number of specific tax planning aspects and opportunities to be considered.

The amount of tax you pay, and therefore profit made, depends on whether you hold the property as an individual, jointly, through a company or via a pension scheme.

Personal Ownership

A private landlord has historically been able to take advantage of significant tax relief by offsetting mortgage interest payments. But the new rules introduced in April 2017 mean that some landlords may now pay more tax on their rental income.

Since the start of the 2017/18 tax year, the new buy-to-let tax system has been phased in. These new rules are now fully in place. This change sees the interest element on a buy to let mortgage being relieved by a 20% tax credit, even in situations where the income is being taxed at either 40% or 45%. Inevitably this means higher profit for landlords which can have an impact on child benefit and personal allowances.

Limited Company Ownership

There are tax advantages to running a letting business through a limited company, particularly if property has been purchased with significant loan capital. Advantages are however offset to some degree by Stamp Duty and Capital Gains tax on any profit when the property is transferred.

We will happily advise you further on the options available and which is most appropriate for your portfolio.

Making Tax Digital for Landlords

HMRC have announced their next phase of the Making Tax Digital implementation. This is aimed at landlords who have gross rental income exceeding £10,000 per tax year.

Under the requirements of MTD for Income Tax, those whose income exceeds the threshold will be required to keep their accounting records electronically and will have to file quarterly returns with HMRC showing details of their income and expenditure, along with any other information HMRC has required.

These rules are due to come into force from 6 April 2024.

We work in partnership with software provider Hammock. Hammock have built a property finance platform for landlords, and we are adding Hammock to our suite of services to help landlords manage and monitor their property income and expenses, in addition to ensuring they are compliant when the time comes.

For a limited period, we are providing this software to you for free. In order to register, please follow this link Connolly’s Hammock Registration, and one of the Hammock team will be in touch to help you get set up.

If you have any questions, please contact your accountant.

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